2 airlines cut unrestricted fares

By Chris Woodyard
USA Today

An airline slugfest between American and Northwest is slashing unrestricted coach and business-class fares by up to 20 percent on hundreds of U.S. routes.

Unrestricted fares are already so high that only a few business travelers making last-minute trips buy them, but experts say the reductions could help revive the high-fare passenger segment for big airlines.

A sharp drop-off in those passengers beginning in early 2000 has caused losses for most of the big airlines. Some of those passengers are buying far cheaper fares on discount carriers.

Thom Nulty, president of the Navigant International travel agency chain, said it's the broadest reduction in business-oriented fares in about a decade.

The fare war broke out Friday when Northwest Airlines matched 10 percent reductions that American Airlines was offering through some major corporate travel agencies. Further rounds raised discounts yesterday to 20 percent on the unrestricted fares and 10 percent on many three- and seven-day advance-purchase fares.

Northwest, whose refusal to follow rivals' increases has forced rollbacks several times in the past year, again played the spoiler's role. This time, Northwest forced American to expand a discount to all travel agencies and customers.

"American's approach looked like a surgical strike, and Northwest is trying to drop the atomic bomb," Nulty said.

The airlines have cut fares on routes where they compete directly.

The new unrestricted round-trip fare, before fees and taxes, between Miami and Los Angeles was $1,896 yesterday, down from $2,344 last week. Between Los Angeles and Greensboro, N.C., the round-trip fare became $1,704, down from $2,104.

Other airlines were divided on how to respond. Delta and Continental said they were matching on selected routes. United said it was monitoring developments but had not matched the fares.