Flying the Cut-Rate Skies

For the past two years, airlines have been avoiding the price wars that helped send Braniff into bankruptcy and several other carriers to the brink. But last week new skirmishes broke out. Regular coach fares between the East and West Coasts have been averaging $367 each way on United, American and Trans World Airlines. People Express, the three-year-old upstart discounter, set off the latest round of cuts by having a limited number of Boeing 747 flights between Newark and Los Angeles for $149 during the day and $119 at night. Said Larry Martin, a general manager at People: "We don't come in to start price wars. We simply come in at our price."

United and World Airways matched People's fares. American will follow on its New York-Los Angeles flights this week but with some restrictions. Last week TWA announced that it was lowering fares by as much as $80 on flights from New York to Los Angeles. The new fares could diminish the profits airlines had hoped to make on heavy business for the Summer Olympic Games.