Texas International Airlines will begin unrestricted low-fare service from Baltimore/Washington International Airport to Texas and beyond on April 1, TXI president Frank Lorenzo announced yesterday.
The every-day, every-seat fare on TXI's service between Washington and Houston and Dallas will be $138 round trip, about $115 less than the regular coach fare linking the areas.
Travelers who use TXI just one way will pay $99 a seat, a 20 percent savings over the regular coach fare. The difference in the fares -- $69 each way if you go round trip and $99 if you go one way -- is designed to encourage travelers to use TXI in both directions'
Connecting flights from here to Las Vegas and Los Angeles will cost as little as $99 each way, Lorenzo said. The new services were announced in a speech to the Aviation/Space Writers Association.
"These fares are not time-limited introductory offerings; they will be available on every one of the 115 seats on every flight,' Lorenzo said. "We will not limit low-fare passengers to a token number of seats."
Super Saver fares to Texas from here range from $151 to $179 round trip but have advance-booking and minimum-maximum stay requirements; seats also are limited to a certain percentage of each flight. Continental Airlines, one of TXI's competitors on the Houston route, does offer unrestricted economy one-way fares of $101 weekends and $95 weekdays for a section of each flight without full meal service.
TXI's Texas service will begin with four round trips a day using DC-9s.
The new service will be the first to the East for the small but aggressive airline, currently locked in battle for control of National Airlines.
In his speech, Lorenzo predicted that low air fares are here to stay even though some airlines may use fuel-price and supply problems as an excuse to curtail discounts.
"I can predict with great certainty that the Worlds, the Lakers, the Southwests, the Texas Internationals and other aggressive carriers will continue to offer meaningful low-fare options to the public, fuel price increases nonwithstanding, because it is basic to their marketing," he said.
The 3 percent or 4 percent bottomline cost impact of a possible 15 percent or 20 percent increase in the price of fuel this year can be offset by a small base fare increase or nominal fuel price surcharge without spelling the end for deep discounting on fares, he said.
During a question-and-answer session, Lorenzo disclosed that TXI officials have been meeting with National Airlines' financial advisers to discuss a revised merger proposal to replace the one that National rejected last week.
In a related development, TXI announced a $35 million seven-year guaranteed floating-rate note issue on the international capital market through a syndicate jointly led by Smith Barney-Harris Upham International Credit, Suisse-First Boston and Kidder Peabody International.
Guaranteed by TXI, the notes will be offered at par with interest calculated quarterly at 0.75 point above prevailing interbank offered rates for three-month Eurodollar deposits. The minimum interest is 7 percent.
Lorenzo said the proceeds are to be used for general corporate funds.