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CalLite's impact on fares felt in its absence


If you don't miss CalLite, you should.

Since the demise of Continental Airlines' discount fare program, ticket prices at BWI have risen at a much faster pace than they have elsewhere in the nation.

Between January and July this year, the average one-way fare from Baltimore to six key cities jumped 33 percent, according to a recent American Express survey. That compared to a 16 percent average fare increase nationwide.

The increases at BWI reflect a national trend toward higher ticket prices as the troubled airline industry inches its way back to profitability. But the price increases have been more dramatic at airports like Baltimore-Washington International, where passengers enjoyed phenomenal fare wars spearheaded by Continental's CalLite program.

"Baltimore was one of the cities affected most dramatically by the pullout of Continental Lite," said Melissa Abernathy, a spokeswoman for American Express Travel Related Services in New York, which conducts a monthly survey of airfares paid by business travelers.

Between January and July, for instance, the average one-way fare from Baltimore to Boston, which hit a low of $97 in the summer of 1994, rose from $160 to $222. Likewise, the average one-way fare from Baltimore to Los Angeles jumped from $216 to $304 during the same time.

But there was some indication that the price increases are starting to slow down. The average one-way fare from Baltimore to the six cities surveyed rose only 1 percent between July and August.

Other cities served by CalLite experienced similar plights. In Cleveland, for instance, average one-way ticket prices rose 31 percent from January through July.

Launched in October 1993, Continental's CalLite mimicked Southwest Airlines' successful strategy of offering low-fare, short-haul service. But the Houston-based airline scheduled far too many flights into markets where the demand didn't justify the level of service.

In February, it scrapped the money-losing operation. And the number of daily flights operated by Continental at BWI has since plummeted from 42 to 17. More importantly, the demise of CalLite removed pressure on USAir and other airlines to keep fares low in many markets.

"It's the return to traditional prices from a windfall year," Ms. Abernathy said. "There's not quite so many seats available at the discount fares."

Because of Southwest Airlines' presence at BWI, fares have remained lower on many East-West routes. In January, the Dallas-based airline will begin flying from Baltimore to several Florida cities, providing new competitive pressure for other carriers to reduce prices.

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