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American Traffic Up, But Planes Less Full

May 5, 1992

NEW YORK (AP) _ American Airlines said its traffic was up in April, but its planes were less full despite the carrier’s sweeping fare changes designed to boost business.

American’s latest traffic results reflect less than three weeks worth of business under the new fare structure. But one travel executive said Monday he has seen no industrywide surge in demand for air travel.

American, the nation’s most influential airline, said in a statement it flew paying passengers 7.1 billion miles last month, up 11.4 percent from April 1991. American had more seats available on a greater number of flights this year, following major acquisitions such as the purchase of lucrative London routes from Trans World Airlines.

However, the carrier’s planes were only 58.5 percent full, down from 61.6 percent in the previous April. On domestic routes, where the recession has held back demand, the planes were only 56.9 percent full, said American, based in Fort Worth, Texas.

An American executive said today that the new fare structure’s early results were consistent with the airline’s expectations.

″April we don’t think is representative at all of the true impact,″ said Mike Gunn, American’s senior vice president of marketing. Gunn said travel seems to be picking up and he predicted evidence will start turning up over the next several months.

On April 13, American put into effect a new fare structure that sharply cut the price of full-coach fares and first-class fares, while limiting the number of discount fares.

The chairman of parent AMR Corp., Robert L. Crandall, said he wanted to improve the carrier’s bottom line by attracting more business while making, on average, the same amount of money per passenger. The radical move comes as the nation’s airlines, including American, are struggling to reverse two years of massive losses.

It remains unclear whether American’s fare strategy is working. The latest traffic figures for American don’t even include a full month under the new fare structure, and the carrier has said it expected the new fares will cost it tens of millions of dollars this spring.

But an executive at a major travel agency said Monday he had seen no increase in air travel.

″Based upon what I’ve seen, nobody’s flying more,″ said John Riener, president of Carlson Travel Network’s commercial operations in Minneapolis. ″The reality is that we’re getting a lot more calls but it is not being translated into bookings.″

Riener, who works with corporate travelers, said companies seem to be using the savings from the cheaper full-fare and first-class tickets only to improve the bottom line of their travel budgets and not to send employees on more business trips.

For now, American’s fare initiative has been a headache for travel agents who are forced to refund tickets sold under the old system even as they make proportionately less money for new tickets they handle, he said.

″We need to see that American is right, that their gamble is paying off,″ Riener said. ″At this point, it’s too early to know. It’s going to take another 60 days to see what’s going to happen.″

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