Airline Industry Fails in Sixth Attempt to Raise Ticket Prices

Major U.S. airlines had reversed a 4% fare hike by Monday, marking the industry’s sixth unsuccessful attempt this year to raise fares.

The latest effort to boost ticket prices failed after strike-threatened Northwest Airlines Corp. and UAL Corp.’s United Airlines refused to match higher fares by AMR Corp.’s American Airlines and others.

Northwest is facing a possible strike by its pilots Aug. 29, and its refusals to match increases by rivals have forced competitors to rescind five previous fare hikes this year.

United also failed to support the entire increase, which would have raised prices on leisure tickets bought seven, 14 and 21 days in advance. The increase would have applied to most domestic flights, except those in and out of Northwest’s hub airports in Detroit; Memphis, Tenn.; and Minneapolis-St. Paul.

“The increase failed because United, uncharacteristically, didn’t go along with the important parts,” PaineWebber analyst Sam Buttrick said. “United matched on a relatively less important fare category.”

Buttrick said there were five unsuccessful attempts to raise air fares in 1997 and three successful attempts, including the last increase, which occurred in September and raised business fares 5%.

American Airlines initiated the latest attempt to raise prices by increasing leisure fares Thursday, and although most major carriers matched it, Northwest, United and Trans World Airlines Inc. did not.

Some industry observers said that by excluding flights in and out of Northwest’s hubs from the increase, AMR was hoping Northwest would support an industrywide price increase by raising fares on routes outside its hubs.