Magazine article Marketing

American Slashes Fares as Airline Price War Erupts

Magazine article Marketing

American Slashes Fares as Airline Price War Erupts

Article excerpt

American Airlines this week launches new cut-price fares from the UK to over 200 US destinations. The scale and depth of the cuts constitute the airline industry's first open declaration of a price war.

American has implemented across-the-board fare discounts of up to 50%, and new prices range from 229 pounds to 349 pounds return. Until now price promotions have concentrated only on major cities.

American cites recent fares from BA and Virgin as provocation. Already this month Virgin has launched 99 pounds one way fares to New York and Boston and round trip fares of 249 pounds fare to Miami and 299 pounds to Los Angeles.

United Airlines claims it will "obviously match" American's fares, assuming they are approved by the the Civil Aviation Authority (CAA). The new fares are on sale from today and they stand unless the CAA rejects them.

Arch-rival British Airways -- facing stiff competition from both American and United Airlines since transatlantic routes into Heathrow were opened up last year -- will only say it is "aware" of the rise. "We're considering our response," says spokesman. …

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