Newspaper article The Christian Science Monitor

Shuttle Sales May Drive Fares Down AIR TRAVEL

Newspaper article The Christian Science Monitor

Shuttle Sales May Drive Fares Down AIR TRAVEL

Article excerpt

THERE'S some good news for air travelers, at least for those on the East Coast of the United States. Competition may well increase in the months ahead on the busy northeastern corridor served by the Trump and Pan Am shuttles, according to airline experts.

Both shuttles are now up for sale. If the two airline routes are quickly sold and that does step up competition, it won't necessarily translate into immediate fare reductions. But that could occur sometime later, analysts say. Effort for market share

Whatever happens to ticket prices, the companies that eventually purchase the two existing shuttles are expected to make an all-out effort to boost their respective market shares as quickly as possible.

And that, say some analysts, could result in improved service, scheduling changes, and other inducements for customers, especially business travelers.

Moreover, the new owners of the shuttles could replace some of the older aircraft currently in use on the existing services.

The experts figures there is no immediate threat of one of the two shuttles, which operate in the well-traveled Washington-New York-Boston corridor, being forced out of business. "The two shuttles can easily continue to exist if they're well run," says Kevin Murphy, an analyst with Morgan Stanley & Company.

That would particularly be the case, Mr. Murphy says, if the new owners, as widely expected, are other airline companies.

"Donald Trump (who owns the Trump Shuttle) is not an airline operator," Murphy says. "He doesn't have other airline operations to share his expenses with."

Pan Am Corporation has broad experience in maintaining various international routes. However, it "apparently needs to raise cash," Murphy says.

The possible sale of the two shuttles comes at an ironic moment in the East Coast air wars. Financier Donald Trump, after all, had only purchased his shuttle - the former Eastern Shuttle - a year ago, following a long strike at Eastern. Mr. Trump paid some $365 million for the shuttle, which had seen its market share plummet as the rival Pan Am operation roared into undisputed dominance.

Pan Am began its shuttle operations in 1986, after paying about $76 million for gate rights at New York's LaGuardia Airport. …

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