In an effort to bring an end to the deep discounting typical of US price wars, Northwest Airlines has stuck its head above the parapet and slashed its advance-purchase fares by up to 40 per cent. The carrier has won tacit support from rivals but it will take time to 'retrain' customers.
'We are hoping that it will be successful in the long term,' says Northwest of its new fare structure, which it calls Everyday Deals. While a 40 per cent reduction in 21-day advance fares - with no blackout dates - might seem attractive, the US travelling public has become conditioned in the 1990s to waiting for the US majors' fare sales which slash advance ticket prices by 50 per cent or more.
The majors would like to steer away from these 'fare wars' and rivals are cautiously supportive of Northwest's initiative, but they are playing a wait-and-see game before formally following suit. 'It seems to make pretty good sense,' says United Airlines. 'It will take time - we feel the consumer has been well trained to wait for sales,' comments Delta Air Lines.
James Ashurst at the American Society of Travel Agents also says only time will tell. 'At this point, the majority of travellers are conditioned to looking for these fare sales and pouncing on them.' But this is probably as good a time as any to try and change ticket-buying habits. When American Airlines introduced a similar concept, Value Pricing, in 1992, it had to be abandoned because the fare wars continued.
During 1997, however, average load factors have approached 80 per cent, the majors have been able to raise prices, and the sales have not cut as deep.
Karen Walker
Source: Airline Business