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The Honolulu Advertiser
Posted on: Tuesday, August 13, 2002

Airlines retreat on fare skirmish

Associated Press

DALLAS — The major airlines, led by Northwest and American, have called off a fare war that erupted this month over the highest-priced tickets, those for last-minute travel.

At the peak of the battle, some fares fell as much as 40 percent.

But over the weekend, published fares for tickets with no advance-purchase requirement were back to their old levels.

Northwest on Saturday restored its pre-Aug.-1 top business and coach fares but also said it will give 5 to 10 percent discounts to customers who buy tickets from a travel agent or directly from the airline.

American, United, Delta and Continental matched Northwest's move to return business fares to their earlier, higher levels, while US Airways kept discounts on some routes, said Tom Parsons, chief executive of the online travel site Bestfares.com.

At the same time it raised fares back to Aug. 1 levels, American kept 5- to 10-percent discounts for tickets sold through select travel agents, Parsons said.

While they lasted, the fare cuts were seen as making it harder for airlines to return to profitability.

The major U.S. carriers lost more than $1 billion in the second quarter. Of the largest seven carriers, only Southwest has been profitable since Sept. 11.

Parsons said that while the deep fare-cutting appears to be over, business travelers tapping the travel-agency discounts could still save up to 10 percent, or $200 off the typical last-minute, coast-to-coast fare.

Northwest and American are offering travel-agency discounts across the board instead of the targeted discounts American offered just before the fare war, Parsons said.

Kurt Ebenhoch, a spokesman for Northwest, declined to say why the airline abandoned the price cuts in favor of travel-agency discounts.