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September 27, 1996: 7:43 p.m. ET
Pan Am, ValuJet return with lower prices but limited flights
From Correspondent Rhonda Schaffler
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NEW YORK (CNNfn) - Airline passengers are finding lower prices with the return of two airlines. Pan Am is flying again and on Monday, ValuJet will return to the air.
Both carriers are offering low fares. ValuJet is charging just $19 a seat for its four flights out of Atlanta. Pan Am is offering flights from New York to Miami for $99, and New York to Los Angeles for $199.
Consumers are snapping up tickets but Thomas D'Agostino, manager of Liberty Travel, said that other airlines' fares will not be driven that far down.
"The major carriers (will) have to be competitive with these fares," D'Agostino said. "But right now, with Pan Am and ValuJet, when they do come back on line, they're going to have limited service, one, maybe two flights a day."
He felt that other carriers will only be competitive during those times.
All the major carriers matched Pan Am's $199 fare from New York to Los Angeles, but only on flights departing at times close to Pan Am's daily 5:45pm flight out of New York. At other times, carriers will charge up to $850.
Pan Am's $99 New York to Miami flight didn't generate a response because that's what most fares are selling for on that route.
ValuJet's $19 one-way fares are garnering a lot of interest, however. Reservation lines are flooded with calls, and competitors in Atlanta, like Delta Air Lines, should begin discounting Monday.
Nichole Bernier, news editor for the Conde Nast Traveler, said airlines are very vulnerable to peer pressure and this will help travelers. (92K WAV) or (92K AIFF)
ValuJet was grounded because of doubts by the Federal Aviation Administration about its maintenance programs. It was being reviewed by the FAA about a series of incidents.
While that review was underway, ValuJet Flight 592 crashed in the Florida Everglades May 11, killing everyone aboard.
Pan Am sought bankruptcy protection in January 1991 and was forced to fold later that year in the wake of the 1988 bombing of Flight 103 over Lockerbie, Scotland, which killed 270 people.
Fares are expected to get even lower in the next few months. Both ValuJet and Pan Am plan to add more flights and routes to their schedules, forcing the major carriers to cut fares. 
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