Whopping fare increases being proposed by US airlines could ground some transcontinental airline passengers next year. Eastern Airlines told the Civil Aeronautics Board (CAB) last week that it planned to more than double its one-way coach fare from New York to Los Angeles and San Francisco on Jan. 1.
United Airlines followed the move.
American Airlines and TWA, the other major carriers on the route, have not yet filed new rates.
Under the airline deregulation act, Eastern entered the transcontinental market last June with low promotional fares to attract new customers. But Morton Ehrlich, senior vice-president of planning at Eastern, says, "We're not getting enough people on the planes to make a profit. We did what we had to do to get into the market and now we're doing what we have to do to stay."
Eastern's one-way coach fare between New York and Los Angeles is scheduled to go from $195 to $414; between New York and San Francisco, from $195 to $432.
Under the new increases, Supersaver fares from New York to Los Angeles -- no and $538 during the day Monday through Thursday. Fares to San Francisco will be slightly higher.
Eastern says its proposed fares could be adjusted within 2 or 3 percent depending on the actions of its competitors.
Marvin Cohens, chairman of the CAB, says, "This is a period of great change while the carriers learn how to price. But I hope we don't see the large carriers follow each other around like sheep.
"I think the new proposed increase is awfully high. It is within the zone the airlines can price without our stopping them . . . but I question the advisability of doing it. It will drive away passengers."
However, Mr. Cohens says that if American and TWA don't match the Eastern fare, fares on the trancontinental route may not double.
David Fraily, vice-president at American, says, "We're studying Eastern's fares, but we don't know if we will propose identical ones. If one of Eastern's competitors sets a lower fare, Eastern is likely to come down."
TWA spokesman Bill Brown says TWA will probably match Eastern's firs-class and coach fares but may not match the Supersaver fares.
Even if transcontinental fares skyrocket, CAB chairman Cohens is confident that some lower airfares will be available "for people who want to look for them." He expects World Airways, Pan AM, and Capitol International, which have been flying the transcontinental route with cur-rate fares, to keep their prices down.
A. L. Pitman, senior vice-president of sales and marketing at Capitol, says, "Fares will go up but we'll still be able to offer low-cost transportation. I doubt if we'll double our fare.Maybe we'll go half again as much."
Consumers who plan, and pay, ahead, can avoid the American fare increase, at least for a year. American has said that tickets can be purchased until Jan. 1 at the current low rates for as far ahead as one year. "If you pay for the ticket, you have the price guarantee for one year," says spokeman David Lobb.
In addition to the proposed increase in transcontinental fares, the major airlines have a 6 percent across-the-board fare increase planned for Nov. 18.
On Dec. 1, Supersaver fares, which account for about 25 percent of domestic ticket sales, will increase on major airlines. Instead of offering discounts between 55 and 35 percent on regular coach fares, the discounts will drop to between 45 and 25 percent. The tickets, which are now purchased seven days in advance, will have to be purchased 30 days ahead of departure.
"The big carriers are losing money this year because of the increases in oil costs and the recession, which is causing traffic to drop off," Cohens explains. "It appears that they are trying to make back last year's losses by boosting fares."