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Airlines slash prices
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February 17, 1997: 6:21 p.m. ET
American triggers fare war with sale to lure back passengers
From Correspondent Rhonda Schaffler
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NEW YORK (CNNfn) - The labor dispute between American Airlines and its pilots union has proven to have some residual benefits for air travelers.
In an effort to lure back disgruntled customers, American is offering discount tickets on virtually all its flights. The move triggered a fare war as American's rivals scrambled to match the company's prices.
The unexpected break during the peak travel season has made travel agents rushing to fill reservation requests.
"In the past, fare wars happened at a time when (the airlines) were trying to generate business at a slower time of the year," said Rafael De Arce, manager at Liberty Travel. "This is the busiest time of the year. This is our high season, from January to April."
American slashed fares by as much as 50 percent for weekday domestic travel and 30 percent for international flights. For example, a round-trip ticket between Dallas and New York cost $318, down from $663. The sale is expected to help American recover the $100 million it lost on bookings in the labor dispute.
Although customers are cheering the lower fares, Wall Street is a little less enthusiastic. Robert Froehlich, chief investment strategist at Kemper Investments, warned that the move will lower profits. (116K WAV) or (116K AIFF)
In addition, the sale won't solve American's labor dispute, a fact many customers recognize. Travel agents, however, say that passengers are refusing to book flights on American for after April 15, when the 60-day cooling period imposed by President Clinton expires. 
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