- The Washington Times - Tuesday, January 7, 2003

CHICAGO (AP) United Airlines yesterday cut some fares sharply for flights involving its two biggest hub markets in hopes of attracting more business travelers.
The move comes after United, trying to raise revenue and remain competitive in bankruptcy, initiated a fare sale last month that other airlines joined.
Among the other big U.S. carriers, American Airlines and Continental Airlines largely matched the lower business fares, analysts said. Delta Air Lines also has been revising its business-travel prices recently.
United said coach fares with no advance purchase for direct flights to and from Chicago and Denver, as well as markets reached through connecting service, were cut about 40 percent.
The fares on tickets purchased seven days ahead for the same flights are being cut as much as 70 percent, said United spokesman Joe Hopkins.
Mr. Hopkins said the airline hopes that the reduced fares on flights where there is no requirement to stay Saturday night will attract business travelers.
"The key message for us is, this is something we feel business travelers have been asking for," he said.
J.P. Morgan analyst Jamie Baker said the United-initiated fare cuts carry both positive and negative implications for the airline industry.
"We believe that stagnant business travel can be kick-started through lower fares," Mr. Baker wrote in a research note. But industry revenue won't really pick up before 2004 and both revenues and stock prices will be pressured in the near term, he added.
Shares in United parent UAL Corp. rose 5 cents to close yesterday at $1.35 on the New York Stock Exchange. Shares in American Airlines parent AMR Corp. climbed 23 cents to $6.95, Continental shares rose 28 cents to $8.60, and Delta shares gained 65 cents to $13.35.
Meanwhile, United, which filed for Chapter 11 bankruptcy protection last month, also said that beginning today it is scaling back food service on many domestic flights. For example, meals are being eliminated for first- and business-class passengers on two- to three-hour flights in the country and Canada outside the normal meal hours.
The move comes as America West Airlines starts an experiment selling meals on board for $3 to $10. Other airlines also are considering charging for food on flights.

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