Don’t mistake the latest price retreat by the nation’s major airlines as a signpost pointing to a coming round of fare wars.
Most industry experts view the airlines’ recent flip-flopping on some leisure fares as nothing but a footnote to a healthy market in the U.S. The nation’s major carriers are having no difficulties filling airplane seats.
The only major bargains air travelers are likely to find today are in smaller, fringe markets, where, the experts say, the competition is much stiffer.
“In the core routes, I doubt if there is any serious interest to engage in price cutting or bloodletting,” said John Stodden, senior analyst with First Chicago Capital Markets Research.
The U.S. air travel market, he predicted, will “remain not just full, but amply full.”
The price skirmishing began last Thursday when Delta Air Lines and AMR Corp.’s American Airlines raised their fares by 4 percent for tickets bought 7, 14 and 21 days in advance. United Air Lines, based in Elk Grove Township, followed suit on Friday, hiking its fares similarly for the mostly leisure travel market.
But the fare hikes evaporated by Monday as Northwest Airlines, the nation’s fourth-largest airline, refused to go along.
It was not the first time Northwest has refused to fall in line over fare reductions in recent months. The Minneapolis-based carrier has stymied five price hikes so far this year by holding the price line on its tickets, industry experts noted.
The major carriers are not immune to competitive pressures; they’ve learned it’s hard to stick with fare increases if their rivals don’t go along. Northwest has played the role of spoiler several times.
But for reasons of its own, Northwest has implemented a number of short-term, temporary fare sales since May.
The major reason, according to Stephen Klein, an industry analyst for S & P Equity Group in New York, appears to be the carrier’s concern about keeping passengers in light of a possible strike. “They will do everything they can to keep people from fleeing,” said Klein.
Contract talks between the carrier and its pilots, who belong to the Air Line Pilots Association, are slated to start on Aug. 17.
Kevin Murphy, an industry analyst with Morgan Stanley Dean Witter in New York, agreed that Northwest is concerned about a possible pilots’ strike and the need to keep its customer base from dwindling.
