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Airfare war escalates
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August 2, 1996: 5:23 p.m. ET
Northwest, KLM match other carriers' cut-rate European fares
From Correspondent John Defterios
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LONDON (CNNfn) - U.S. carrier Northwest Airlines Inc. and its partner KLM Royal Dutch Airlines have cut fares from the United States to Europe in response to reductions by American Airlines and Continental Airlines.
The cuts come at a time when airline profits are up for most carriers and passenger loads are high.
Yet while fares are coming down, analysts say the action won't set off a fare war.
Chris Partridge, airline analyst at Avmark, said higher passenger loads make a cutthroat price war unlikely.
"You have to remember that the traffic is booming at the moment -- I mean you can barely get on airplanes," he said. "If (airlines) make a little bit of noise and say, 'We're discounting tickets 30 to 40 percent,' the fact of the matter is they're not actually selling that many tickets at that price."
The price cuts announced so far are for travel mostly during the fall and winter, when passenger volumes traditionally fall off.
Continental Airlines has cut fares by as much as 25 percent on some of its flights, but passengers must book seats three months in advance and cannot use tickets before Nov. 1.
American Airlines, credited with starting the latest round of lower fares, has cut fares to London and Paris by 15 percent if passengers book by Aug. 5. However, passengers must complete travel from September through mid-December.
Partners such as U.S.-based Northwest and Dutch carrier KLM have matched many of the fare cuts for flights from the United States, although heavyweights British Airways and United Airlines have not.
Yet in the cyclical world of airfares, as the summer ends, analysts say more carriers may jump on board.
Still, John Skinner, a travel counselor with American Express Europe, said getting a low fare isn't always easy. (132K WAV) or (132K AIFF)
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