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CONTINENTAL PLANS TO RAISE FARES 5 PERCENT TO HELP RESTORE RATIONALITY

CONTINENTAL PLANS TO RAISE FARES 5 PERCENT TO HELP RESTORE RATIONALITY
 HOUSTON, Aug. 20 /PRNewswire/ -- Continental Airlines today said it will increase fares 5 percent as scheduled Sept. 1, but limit the change to markets where American Airlines does not compete.
 Although this approach will result in unevenness in nationwide pricing, it is far preferable to matching American's highly inequitable and self-serving April 9 fare structure. American will raise fares up to 33 percent or more by restoring April 9 fare levels, plus 4.4 percent, mainly in 800 markets it dominates and controls. This perpetuates serious inequities, inherent in the April 9 fare levels, which are very disadvantageous to consumers and competing airlines.
 For instance, American has "dictated" a $380 fare on its nonstop Dallas-New York route, restoring the April 9 level, plus 4.4 percent, and representing an increase of 12 percent versus today's fare. But on Continental's nonstop Houston-New York route, a longer trip than DFW- NYC, American will only "permit" a $330 fare. As a result, Dallas consumers are held hostage and forced to pay a higher per-mile cost at the DFW hub American controls, while at the same time American tries to put downward fare pressure in an important Continental market.
 The above example is characteristic of the so-called "Value Pricing" plan, which American designed to disproportionately favor itself while putting


predatory pressure on competitors. Continental and other airlines are pursuing antitrust litigation against American on these and other grounds.
 Contrary to American's original assertion that value pricing is "mileage-based," the nation's largest airline has sought to corrupt the relationship between travel distance and fares when it can gain a competitive advantage by doing so.
 "We will go ahead with a straightforward 5 percent increase in markets where American is not a factor," a Continental spokesman said.
 -0- 8/20/92
 /CONTACT: Continental Airlines corporate communications, 713-834-5080/ CO: Continental Airlines ST: Texas IN: AIR SU:


PS -- NY072 -- 1848 08/20/92 16:05 EDT
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Publication:PR Newswire
Date:Aug 20, 1992
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