States over the next three months.

The deals could mean savings of up to 30 percent on flights to the US from Bermuda.

The discounts could also be a boost for tourism with Americans taking cheap flights to the Island.

USAir, Continental and Northwest will all offer reduced, winter rate flights up to April 15. American Airlines and Delta are expected to follow suit.

The reductions follow a price war which started in the United States on Tuesday when Northwest announced huge cuts to destinations in the US, Canada and the Caribbean.

American Airlines, United Airlines, USAir, TWA, Continental and Delta matched the cuts in most markets. Americans have been rushing to take advantage of the reductions -- some up to 45 percent.

In Bermuda the cuts mean passengers flying to "gateway cities'' in the United States could save as much as $70, with more savings on connecting flights.

While discounts at present are limited to winter flights, Bermudians will be able to take advantage of more flights between March 2 and April 15.

For example, USAir are currently only flying to Philadelphia but will resume flights to Boston, Baltimore and New York's La Guardia on March 5, offering at least six weeks of discount fares.

USAir manager Mr. Herby Siggins said: "It means a saving of $70 on our cheap excursion fares. It is a special 14-day advance purchase fare.

"The cheapest 14-day advance purchase to Philadelphia will be a reduction from $297 to $229, which is subject to various taxes.'' The airline which started the price war, Northwest, has no service to Boston until the daily 2 p.m. flight returns in March.

A spokeswoman, in the United States, said a winter fare of $270.95 would apply for the round trip from March 2 until April 15.

Continental's flight to Newark is also discounted at $199 midweek and $232 at weekends. That is the base fare to which taxes will be added.

But beyond the "gateways'' savings are also available and Mr. Willie Forbes, general manager at Darrell Travel, had some examples. He pointed out that people seeking skiing holidays in Salt Lake City would find weekend fares dropping from $551 to $415, and midweek fares from $509 to $356.

Those wishing to fly to Denver would find reductions from $551 to $445 at the weekends and $509 to $385 during the week.

All the discount tickets must be bought before next Tuesday, and all travel must be completed by April 15.

Mr. Forbes added: "There is another condition that each trip must include a Sunday before returning but I do not think anyone will have a problem with that.

"Although tickets must be booked and paid for by Tuesday it is quite possible that it will be extended.

"Three of the airlines are offering discounts and I am sure the other two will follow them in the next couple of days.'' Last week British Airways announced its winter discount scheme to England. The January Early Saver is a special fare of $479 midweek and $499 weekend for flights between Bermuda and Gatwick Airport for travel between January 15 and March 15.

Tickets must be issued during the month of January,and payment made within 72 hours of booking.

American industry analysts said the US discounts could bode poorly for the airlines, which need to maintain regular fares and profit margins on their longer flights to offset lost revenues as they introduce newer cheap, short-haul flights.

Although carriers typically cut fares in January to stimulate winter traffic, industry sources were startled by the size of the discounts because advance bookings appeared to be relatively healthy.

"This is a significantly deep discount for the season,'' said Mr. Don Fleming, spokesman for Trans World Airlines.

However, Mr. Fleming and other industry officials were quick to note that the latest round of cheaper fares paled in comparison with the huge summer discounts of 1992, which threw the industry into chaos and resulted in huge losses.

Bermuda, meanwhile, appears to have escaped the affects of the North American Free Trade Agreement which has placed new economic barriers on the Caribbean.

NAFTA has erased the barriers between Mexico, Canada and the United States but all Caribbean tourists travelling to and from the United States will have to pay a $6.50 customs tax per person on their air and sea fares, according to Air Jamaica officials. NAFTA eliminated customs tax exemptions enjoyed by Jamaicans.

Local airlines and US Customs spokespersons said they had not been informed of any customs tax. A Customs spokesman said: "Bermuda is not in North America and it is not in the Caribbean.''