Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 2, 1991 TAG: 9104020052
SECTION: BUSINESS PAGE: A3 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
After slashing fares to cure travelers of their war and recession jitters, airlines will begin raising most ticket prices next week.
The changes won't eliminate all discounts, but they will increase fares for people who plan trips on short notice.
Airlines were still scrambling Monday to get their new fare structure worked out. As a general rule, the changes will raise the rates for travelers who provide either a seven-day or a 14-day notice, while offering cheaper fares for people who can plan farther in advance. The changes were first put in place by American Airlines.
Despite the recent rash of fare cuts, experts said the increases were inevitable, with airlines losing billions of dollars since the Persian Gulf crisis and the economic downturn cut deeply into the industry's revenues.
"I think it makes a lot of sense," said Lee Howard, chief executive of Airline Economics Inc., an aviation consulting firm in Wsahington. "If you're going to give low fares, then you have to put sufficient restrictions on those . . . or else your average fares will be so low you can't afford to operate."
American said its cheapest fares would be for passengers who could give 30 days' notice. Other major carriers later decided to offer a cheap 21-day advance ticket. American had not decided by Monday night whether to go along with that aspect of the restructuring. The new fares take effect next Tuesday.
As the other airlines went along with America's new fares, they steadfastly refused to make any predictions on what will happen to the prices paid by most travelers.
"I'm not real clear; this thing has gotten so complex," said Northwest spokesman Doug Miller.
When others were pressed about the matter, they pointed their fingers at American. "It wasn't our initiative," United spokeswoman Sara Dornacker said.
by CNB