Rivals Join Continental in Raising Fares

All major U.S. airlines have matched a sharp fare increase implemented by Continental Airlines Inc. on Friday to compensate for high fuel costs.

Northwest Airlines Corp., seen as a frequent spoiler in airline fare hikes, matched the increases in certain markets. Most recently, Northwest held out on an attempted $30 round-trip fare increase the weekend of Feb. 19.

In the competitive world of airline fares, most major airlines must typically match a fare increase for it to stick, as travelers will quickly switch carriers for a lower fare.

On Friday, Continental raised round-trip domestic air fares by up to $40, the third rise in six months and one of the sharpest across-the-board increases in recent years.

By Sunday, AMR Corp.’s American Airlines and UAL Corp.’s United Airlines, the two biggest carriers, plus Delta Air Lines Inc., US Airways Group Inc., America West Airlines and Trans World Airlines Inc. had all matched the increases.

Low-cost carrier Southwest Airlines Co., the No. 7 U.S. carrier, usually does not match fare increases by other carriers and is not seen as needed to sustain an increase.

With fuel their second-biggest cost after labor, airline executives have predicted industry-wide losses at current fuel-price levels.