Advertisement

Our coronavirus coverage is free for the first 24 hours. Find the latest information at tampabay.com/coronavirus. Please consider subscribing or donating.

  1. Archive

American retreats on air-fare plan

American Airlines seems to be up in the air about its fares.

Its simplified fare structure, which has been steadily eroded by special offers and huge discounts since shortly after its introduction in the spring, may become a bit more complex.

Although there have been no significant changes in American's fares recently and none is planned, the company has decided it will likely follow other carriers as they make basic pricing changes.

"I believe in (the simplified plan), but we have abandoned it. We are going to file every cockamamie fare anybody else wants to file," the airline's chairman, Robert Crandall, said in comments to the British Broadcasting Co. and reprinted this week in Aviation Daily, an industry trade publication.

Crandall's comments were more explicit than his remarks to industry analysts last month where he implied that the company would stop defending the plan.

The fare system was intended to eliminate a maze of fare possibilities by setting up four price categories and eliminating special deals like lower fares for conventioneers and cheaper tickets for people trying to get to a family funeral.

But a summer of coupon discounts, half-price domestic fares and a slow return of the special fares, left American trying to hold the line on its fare system.

"If the industry simply will not coalesce around a particular fare structure, then no one carrier can. . . . We tried to provide some price leadership and it didn't work, and so we are back into the death by a thousand cuts," Crandall said.

American spokesman John Hotard said Friday that Crandall's comments were misunderstood.

Hotard said that American has been forced to deviate from the Value Plan in order to remain competitive.

"What we're saying is that now we are filing (fares) market-by-market, not across-the-board. Right now in the east, for example, in some USAir and TWA markets, there are two (extra) fares out there that we call "junk fares,' one-way discounts or less-restricted round-trip fares we've put in just to match what our competitors had," Hotard said.

A chief goal of American's plan was to entice more passengers to pay full fare. The change with perhaps the most far-reaching implications was a half-price sale started this spring. After Northwest Airlines introduced a "grownups fly free" promotion, American tried to wedge the discount into its pricing structure.

The result: half-price domestic tickets for advance purchases, whether the passenger was with a child or not.

The cheap tickets are widely blamed for the steep losses the industry reported in the spring quarter and more losses expected when results of the July-September quarter are announced.

_ Information from the Fort Worth Star-Telegram was used in this report.

YOU MIGHT ALSO LIKE

Advertisement
Advertisement