Airlines Try Another Round of Rate Increases

Some major airlines raised leisure fares 3% and business fares by 1%, signaling what could be the industry’s third increase this year. Continental Airlines was the first to increase fares, a move that was quickly matched by United Airlines, Delta Air Lines and America West. Northwest Airlines said it would not match the latest increases, which could suggest the latest hike will not stick. When Northwest failed to go along with four of the six increases by rivals earlier this year, the other airlines quickly dropped back, cutting their fares to stay competitive. The two fare hikes that did succeed this year have raised leisure fares 7% and business fares 3%. Representatives of AMR Corp.’s American Airlines weren’t available for comment. Analysts attribute the price increases to a thriving economy that has boosted demand to record levels for many carriers. Also, a recent rebound from last year’s plunge in fuel prices has made it more expensive for airlines to fly their planes. Airlines typically raise fares on a Friday and watch during the weekend to see if competitors follow. If none do, the increase is usually withdrawn Monday.