fares between the United States and Bermuda by 30 percent.

And Continental quickly followed suit, trimming its fares to the same level.

USAir was also forced to toe a similar line as part of a chain reaction.

Yesterday Bermuda's Tourism Director Mr. Gary Phillips was jubilant at the price-cutting spree.

"It's great news for the Island,'' he exclaimed.

He said it was a big triumph for Tourism Minister the Hon. C.V. (Jim) Woolridge's battle to cut fares.

Mr. Woolridge told The Royal Gazette : "I'm extremely delighted. It's great for the traveller. It's great for Bermuda.'' The reduced rates will cover the high season, August 20-September 30; and October 1-December 14, the low season. Tickets must be snapped up before August 31.

The deal offered by American -- the nation's largest carrier -- will send the Bermuda-New York round-trip high season fares plummeting to $193, during weekdays. Weekend travellers between the two destinations will pay just $222.

Low season fares for the same route will drop to $165 and $193 respectively.

It will be a massive boon for US visitors to the Island, and Bermudians going to America.

The airline's Bermuda-Raleigh low season rate will be $198 midweek, $226 weekend.

Other sample low season fares are: Bermuda-Chicago (via New York or Raleigh): $272 (midweek), $301 (weekend).

Bermuda-Hartford (via New York or Raleigh): $198 (weekday), $226 (weekend).

The cut-price fares will only cover trips between three days and 30 days.

American's local general manager Mrs. Carol DeCouto said the move would boost travel, particularly during the off-season.

"We have been hearing from hoteliers how they need encouragement to fill their bedrooms.

"We hope that this will spur people to travel to Bermuda.'' The move came a day after hoteliers -- who have been meeting with American to discuss ways to promote the island in the off-season -- announced a "weather guarantee'' in which guests will receive discounts if the temperature falls below 68 degrees Fahrenheit.

Mr. Peter Dolara, vice-president of an American division covering Bermuda, said the new rates were aimed at boosting the Island's economy and the hotel industry.

He added American was interested in promoting a leading tourism destination.

American, using a 194-seat plane, has two daily Bermuda-New York flights, the first leaving at 7 a.m., the second at 1.30 p.m. The trip to Raleigh leaves at 5 p.m.

New York-Bermuda flights arrive at 12.25 p.m., and 7.15 p.m.

A spokesman for Continental said the company had to follow American's line to remain competitive.

"We are matching American,'' he said.

Continental, using wide-body 257-seat jets, has two daily Bermuda-Newark flights.

USAir flies a Boeing 757 one 150-seat aircraft between Bermuda and La Guardia each day.

It also runs direct flights from Bermuda to Baltimore, Charlotte, and Philadelphia.

Overseas spokeswoman Ms Patricia Goldman said: "We will be offering similar discounts as American.'' Delta's local manager Ms Jackie Zuill was yesterday unavailable for comment.

But it is believed all airlines will be forced to follow American's lead.

Mr. Phillips said the department had faxed more than 2,000 American travel agencies about the news.

"We were quick off the mark to advise agents about the new fares,'' he said.

"I'm always pleased when we are seen to be competitive as other destinations in respect of air fares.'' Mr. Woolridge said he hoped the new rates would end the trend for last-minute bookings and said believed his talks with American about more competitive rates had paid off.