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Airlines Put Nation on Sale

Southland travelers benefit as carriers aim to fill seats

August 12, 2003|James F. Peltz | Times Staff Writer

Airline fare sales are arriving on cue as autumn draws near, and this year Southern California travelers will be big beneficiaries.

The carriers slashing fares include AMR Corp.'s American Airlines, UAL Corp.'s United Airlines, Northwest Airlines and JetBlue Airways, generally for leisure travel starting next month.

Some of the sales will be short-lived, with requirements that tickets be purchased in the next week or two. But America West Airlines has effectively put transcontinental travel on sale indefinitely, with walk-up business fares as low as $299 one way starting Oct. 26.

That day, the carrier said Monday, it will launch nonstop service from Los Angeles International Airport to New York's Kennedy Airport and Boston's Logan Airport.

The United and JetBlue sales are also good news for Southern Californians. United is the biggest airline at LAX, and New York-based JetBlue's West Coast base is in Long Beach. What's more, AirTran Airways, a unit of Orlando-based AirTran Holdings Inc., has launched daily service from LAX to Atlanta with sale-priced fares.

As summer vacations wind down, airlines typically slash prices to stimulate traffic during the slower fall months. Industry leader American, Delta Air Lines and United -- which is in bankruptcy proceedings -- all remain in deep financial trouble and need every penny in revenue they can get. They're cutting fares anyway, to fill as many seats as possible.

"For consumers near well-served airports, it's a great time to fly," said Richard Bittenbender, an analyst at Moody's Investors Service.

Discount airline JetBlue offers transcontinental flights for less than $299 each way, flying from Long Beach to New York. American is promoting coast-to-coast flights of no more than $299 each way in coach, from Long Beach, Orange County, San Diego and San Jose, though not LAX.

America West, a subsidiary of America West Holdings Corp. of Phoenix, has been transforming itself into a low-fare airline over the last two years by working to trim operating expenses and simplifying its fare structure. This fall, it will take on the fiercely competitive transcontinental market at LAX.

That market is dominated by American and United, which have nine and six daily flights, respectively, from LAX to New York's Kennedy. America West will begin with two daily nonstops to Kennedy, along with two flights daily between LAX and Boston. The carrier plans to start nonstop service between San Francisco and New York in December.

America West executives say they're targeting business travelers who are no longer willing to pay $1,000 or more for last-minute, walk-up fares that typically cost far more than leisure fares booked in advance. For instance, American's walk-up fare for an LAX-New York flight on Oct. 26 is listed at $1,157.

America West said Monday that most of its walk-up tickets on the LAX-New York route would cost $299, and that advance tickets would be less expensive. None of the America West flights will have Saturday night stay requirements.

"This will be a good test of how much business they can extract from the big network carriers," said Robert Mann, president of the consulting firm R.W. Mann & Co. Even if those airlines match America West's fares, America West should be able to stay in the market because the carrier has lower operating costs, he added.

American and United spokesmen declined to comment on whether those carriers would match America West's fares. But both said their airline offers better service, partly because American and United mostly use wide-body Boeing 767s to fly cross-country. America West plans to use the smaller Airbus A319.

America West executives said they weren't worried about others matching the carrier's prices.

"We can tolerate a retaliation that these big guys may or may not want to throw at us," Doug Parker, America West's chairman and chief executive, told reporters on a conference call.

Said Moody's Bittenbender: "I'm sure the existing carriers are not going to ignore the entrance of America West in the transcon market." If a rival such as America West made money on the route, "they could become a significant thorn in your side," he added.

America West is one of the few airlines turning a profit from operations. In this year's second quarter, most of the airlines made money, but largely because they received government aid for the financial damage they incurred during the Iraq war.

In the quarter, America West said its profit -- excluding such one-time items -- totaled $12.9 million on revenue of $576 million, compared with a $12.9-million net loss a year earlier.

America West Holdings' stock rose 31 cents Monday, or 4%, to $7.81 a share on the New York Stock Exchange.

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Eastbound

As more discount airlines move into the transcontinental market, Southern Californians are enjoying a wider array of flights to the East. Here is a partial list:

*--* Airline From To Flights per day American LAX New York/Kennedy 9 United LAX New York/Kennedy 6 JetBlue Long Beach New York/Kennedy 7 AirTran LAX Atlanta 2 America West* LAX New York/Kennedy 2

*--*

*Service begins Oct. 26

Source: The airlines

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