Lowestfare.com hitting more turbulence

Tuesday, May 7, 2002 | 11:13 a.m.

More layoffs are planned at Las Vegas-based Lowestfare.com following the Internet travel agency's decision to quit selling airline tickets.

The company announced the decision in a posting on its Internet site, lowestfare.com. The action was effective Thursday and the company said passengers holding tickets sold by Lowestfare wouldn't be affected.

The company, controlled by financier Carl Icahn, was built on sales of discounted plane tickets on TWA, an airline once controlled by Icahn. When AMR Corp., the parent company of Dallas-based American Airlines, acquired TWA for $4.2 billion in 2001, Icahn's source of inexpensive tickets dried up, leaving Lowestfare without its key competitive advantage.

A spokeswoman for Lowestfare said Monday the company would now focus on high-end escorted tours and cruises, specialties of a Lowestfare sister company, Maupintour LLC, also based in Las Vegas.

Another Lowestfare sister company, Jetset Tours, which specializes in the international market, also will discontinue selling airline tickets.

The spokeswoman, who asked not to be identified, said the company's inability to negotiate for cheap seats on American Airlines "dealt the mortal blow" to Lowestfare's competitiveness. Icahn fought unsuccessfully in court to keep the deal he had with TWA.

Icahn also owns the Stratosphere hotel-casino, whose rooms have been offered in Lowestfare package deals, and the two Arizona Charlie's properties.

The action will result in an undetermined number of layoffs of Lowestfare employees. The spokeswoman said the company is making efforts to retain staff in other operations. The spokeswoman did not say how many employees work at the Las Vegas office, but in the last round of layoffs in September, 460 positions were cut, trimming about half the work force.

Travel industry experts were not surprised by the decision. Analysts said the company was facing financial difficulties early last year when the TWA deal ended and the travel downturn that followed the terrorist attacks in September made things worse.

Minneapolis-based travel expert Terry Trippler said Lowestfare's inability to strike another deal for inexpensive seats on planes kept the company behind competitors such as Expedia and Travelocity.com