- The Washington Times - Friday, June 18, 2004

US Airways started offering reduced fares on flights out of Washington-area airports yesterday in a challenge to its low-cost competitors.

Fares to Orlando, Fla., and Myrtle Beach, S.C., cost as little as $79 one-way from Ronald Reagan Washington National Airport and Washington Dulles International Airport. Trips to Las Vegas and Phoenix can be purchased for $99.

The fares — called GoFares — are up to 74 percent lower than before on last-minute purchases, depending on the route and schedule, US Airways officials said.

“Bringing these low, simple fares to our customers is a key component of our broader transformation plan,” said B. Ben Baldanza, US Airways’ vice president for marketing.

Low-fare airlines are its nemesis, drawing customers away at a time US Airways can least afford to lose them, according to industry analysts.

Low-fare airlines operate primarily smaller jets between midsized cities and change schedules frequently to meet customer demand. Major airlines, or network carriers, operate bigger jets on fixed schedules usually between large cities.

Network carriers also tend to have higher costs, which explains why United Airlines is in bankruptcy protection while US Airways and Delta Air Lines are struggling to avoid it.

Meanwhile, low-fare airlines, like JetBlue Airways, Southwest Airlines and AirTran Airways, are consistently profitable.

US Airways officials have decided that if they can’t beat the low-fare airlines, they would instead try to join them by mimicking their business plans.

For Washington-area residents, the competition means travel bargains.

“They are not sale fares,” said David Castelveter, US Airways spokesman. “This is a change in the fare structure.”

US Airways employees are promoting their customer service and new fares by handing out doughnuts and other giveaway items on street corners or offering free gasoline and car washes.

Other cities available for GoFares include Atlanta, Kansas City, Mo., New Orleans, Norfolk and Tallahassee, Fla.

Airline industry analysts say the new fares show US Airways is in a struggle for survival against competitors.

“It’s great for air travelers in the area but as this fare war goes on there are going to be some casualties,” said David Stempler, president of the Air Travelers Association, an airline passenger advocacy group. “It would be hard for all of these carriers to survive.”

US Airways might succeed with its new plan, but only if it significantly reduces expenses, said David Swierenga, a Vienna-based airline financial consultant.

“They have to have a cost structure that allows them to offer these low fares and be profitable at the same time,” Mr. Swierenga said.

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