Airline Fare Increase Short-Lived as Northwest, TWA Decline to Follow

U.S. airlines raised leisure fares 4% and business fares 2% over the weekend, only to repeal the increases Monday after Northwest Airlines Corp. declined to follow suit.

Continental Airlines Inc. raised its fares Friday and was quickly followed by Delta Air Lines Inc., AMR Corp.’s American Airlines, US Airways Group and American West Holdings Corp., according to Bestfares.com, an online air fare advisor.

It was the airlines’ first attempt to raise fares this year, after failing 15 times in 1998 to post an increase that would stick. The higher fares were in place all weekend, leading to more expensive tickets for customers who were booking flights. Continental, Delta and US Airways revoked the increases Monday morning, a move likely to be followed by other carriers.

“Continental started it, American Airlines was just a bit player, and then it died,” AMR spokesman Tim Smith said.

Northwest and Trans World Airlines Inc., two carriers that have struggled to increase customer traffic amid labor and financial problems during the last year, didn’t go along with the increases made by other airlines.

Although U.S. airlines can’t legally coordinate their fare increases, they usually will maintain higher fares only when all rivals follow suit so they remain competitive. Last year’s attempted increases also fell apart after Northwest declined to follow suit.

Most U.S. airlines will release fourth-quarter earnings reports later this week, with some showing a slowdown in profit tied to weaker revenue per passenger.

Northwest declined to comment.