THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: WEDNESDAY, June 22, 1994 TAG: 9406220417
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By PHIL MURRAY, STAFF WRITER
DATELINE: 940622 LENGTH: Medium
Round-trip fares on many of the routes served by Continental's no-frills, high-frequency service have risen $10 to $30 this month. Many of the increases came late last week, and other carriers have followed suit.
{REST} ``They are creeping up gradually,'' said Diane Loprete, general manager of Gibson World Travel in Virginia Beach. ``I knew it was too good to be true.''
Continental touched off a price war in Norfolk and other East Coast cities last fall when it introduced its low-fare service, dubbed CALite. The idea was to keep costs low by using planes at a higher frequency on short routes.
Round-trip fares from Norfolk to many cities in the Northeast, Florida and elsewhere fell significantly. A $69 round-trip fare to Newark - offered by Continental and other carriers - proved very popular in Norfolk.
At the time, Continental insisted that the new fare structure was permanent, not a short-term promotion.
The round-trip Newark fare, with restrictions on advance purchase and overnight stay, now is $99. Continental's so-called ``peanuts'' fare to Newark - offered one way on an unrestricted basis - has risen from $69 to $79.
Dave Shipley, a spokesman for rival USAir, said Continental initiated the fare increases.
``It might be an indication that the pricing was at a non-profitable level,'' Shipley said.
Officials at Continental could not be reached for comment Tuesday.
Since October, Continental's daily flights at Norfolk have risen from three to 28. In that time, the carrier has moved into second place at the Norfolk airport with 22.4 percent of the market. USAir remains No. 1 with 39.4 percent of the market. by CNB