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Air Carriers Turning Back on Fare Hikes

From Associated Press

After irritating Monday morning travelers with 5% fare increases, a number of major carriers quickly backed off and returned to last week’s prices.

Northwest Airlines raised its full-fare, unrestricted ticket prices by 5% last week, and other airlines followed with across-the-board increases. But carriers began reinstating the old fares Monday.

“We have withdrawn our increases to remain competitive,” said Bill Berry, a spokesman for Delta Air Lines, which had waited until late Friday before joining other carriers in boosting fares.

“They needed to,” said Sal DePace, president of Golden Jet Travel Service in Marietta, Ga. “This morning, I was almost knocked off my chair when I looked at the fares.”

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DePace said that earlier Monday, one of his customers had to pay $1,104 for a round-trip fare on Delta from Atlanta to New York.

“He was very ticked, but he said he had to make that trip,” DePace said.

Analysts had attributed the fare increases to the continued strong national economy, solid booking levels and the expected rise in post-summer business traffic. They said the carriers might return later to the higher fares.

American Airlines spokesman Tim Smith said his carrier pulled back its fares Monday not so much because of such negative reactions, but as “a competitive response.” He said the higher fares were in place such a short time that he doubted most people were aware of the increases.

United Airlines’ initial fares Monday indicated they had withdrawn the 5% increase. A United spokesman said an industry company that transmits new fares had misunderstood--the carrier wanted to withdraw the increase in selected markets, such as those in which it competes with Southwest Airlines, which didn’t raise fares last week.

Spokesman Joe Hopkins said the higher fares were being reinstated in other markets.

“Fares are volatile in the airline industry,” Hopkins said. “Fare changes are made at lightning speed, and that’s the nature of this very competitive business.”

“Imagine how confusing this is to the consumer,” DePace said.

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The increases over the weekend had boosted an unrestricted coach round trip between Dallas and New York to $1,584 from $1,508, Washington and Minneapolis to $1,066 from $1,016 and Chicago and Los Angeles to $1,856 from $1,768.

Southwest had declined to go along with the increases.

“Our plan is to stay the course,” spokeswoman Linda Rutherford said.


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