United Slashes Fares on All routes up to 20%

WingNaPrayer

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[P][B style=FONT-SIZE: 14px]CHICAGO, Illinois (Reuters) --[/B] [B style=FONT-SIZE: 14px]Bankrupt United Airlines, seeking to spur revenue in a slow period, on Wednesday reduced fares by up to 20 percent on almost all of its 1,800 daily flights from January to early April.[/B] [/P]
[P]The leisure fare sale is United's first since it filed for bankruptcy protection on December 9, along with parent UAL Corp. and two dozen other units. The world's No. 2 carrier pledged no service disruptions when it filed for bankruptcy. [/P]
[P]The move appears to cut fares by about 10 percent for domestic flights and 15 percent to 20 percent for international flights, but one airfare expert said it is unlikely to spark a fare war. [/P]
[P]It is not going to be a major fare war because it's not (very deep), said Terry Trippler of TerryTrippler.com. It is not going to have a major impact on the industry. [/P]
[P]United is trying to slash costs across its business including reportedly seeking $2.4 billion a year in labor cuts, and is also restructuring aircraft leases and other capital costs. [/P]
[P]Some analysts believe United may be signaling that it does not plan to flood the market with heavily discounted tickets to raise cash for the bankruptcy. [/P]
[P]I think they are sending a message to other carriers that they are not going to play the lowball game, said Tom Parsons, Bestfares.com chief executive. They will not cut rates unless they are forced to by the low-cost niche carriers. [/P]
[P]Much of United's sale appears to match competitors' current rates, and rivals on Wednesday had already matched United where fares were lower, Parsons said. [/P]
[P]He said some of United's rates are higher than they were two weeks ago and may drop again soon. Some fares may drop even lower industrywide, as other carriers roll out their typical winter fare sales. [/P]
[P]Under the new discounts, round-trip flights between Chicago and Boston and Chicago and New York City run $198. Chicago-Denver runs $208 and San Francisco-Washington D.C. $376. Flights between Chicago and Frankfurt run $498, with Chicago-Hong Kong $858 and New York City-London $258. [/P]
[P]As we do every year around this time, we are trying to stimulate travel in what is typically a slower travel period, United spokesman Chris Brathwaite said. [/P]
[P]Probably the best deals are to Hawaii, where a passenger could save $500, Parsons said. United's 14-day advance purchase for Hawaii compares with a typical 60- to 90-day requirement from most airlines, and several competitors have matched the fares and advance purchase requirement, he said. [/P]
[P]But consumers should be cautious because they may still find cheaper fares on some routes than these, he said. [/P]
[P]The nonrefundable tickets have restrictions including advance purchase and minimum or Saturday night stay. Prices do not include taxes, security fees and other possible charges. [/P]
[P]Tickets must be bought by December 31, for U.S. travel from January 1 to April 4. Latin America and Pacific fares are valid for travel from January 13 to March 31 while European fares are valid for travel from January 13 to March 8. [/P][BR][BR][BR][BR]
 

KCFlyer

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There they go....targeting the leisure traveller to save them. Why not drop unrestricted fares 40-50% instead of launching a "loss leader" fare geared to the leisure traveller? This is a desperation move that doesn't bode well for UAL. What they are doing reminds me of the old story about the guy who was selling silver dollars for fifty cents a piece. Someone asked how he expected to make any money and he responded "volume, volulme, volume".
 

Connected1

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[blockquote]
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On 12/19/2002 6:02:08 AM KCFlyer wrote:
There they go....targeting the leisure traveller to save them. Why not drop unrestricted fares 40-50% instead of launching a "loss leader"; fare geared to the leisure traveller? This is a desperation move that doesn't bode well for UAL. What they are doing reminds me of the old story about the guy who was selling silver dollars for fifty cents a piece. Someone asked how he expected to make any money and he responded "volume, volulme, volume".
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Let's not go overboard, KC. $198 round trip from ORD to BOS still doesn't approach the marginal cost of carrying an additional passenger. If they attract some additional discretionary travel because of this, they will be better off for it. Slashing unrestricted fares during the holidays does not spur additional discretionary travel - it just trashes your yields.

You're right that things don't bode well for UA, but not because of this.
 

linevans50

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Dec 19, 2002
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I have to take a few trips in Jan and Feb. I checked AMR and UAL. The difference in price is not that much. With all the talk about UAL going into Ch 7 I would rather book with AMR and not lose my money.