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Added 23 August, 2017

Budget carriers are driving down trans-Atlantic airline fares

Low-cost airlines like Norwegian Air are ramping up service across the Atlantic and because of that, American Airlines fares just plunged 9.1 percent, the most since right after the recession ended in 2009. Delta Air Lines Inc. also recorded a sharp drop in the same yardstick. While that’s great news for bargain-hunting travelers, it’s a blow for traditional airlines. The increased seat supply is dragging down fares in a lucrative overseas market just as a rebound in domestic pricing is starting to look shaky. American and United rattled investors last month when they forecast tepid revenue growth and signaled that an already tenuous grip on ticket prices was slipping. “Atlantic is challenging. The fundamentals are challenging,” Don Casey, American’s head of revenue management, said in a conference call last month to discuss earnings. “There is excess capacity in the marketplace. The capacity is being driven by low-price carriers.”

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