Carriers Match Northwest’s Hikes

As expected, nearly all major U.S. airlines on Friday matched fare increases launched by Northwest Airlines, boosting prices of a round-trip domestic ticket by about $40 for business travelers and $20 for leisure travelers who book ahead.

Northwest announced its higher fares Thursday, and by late evening American Airlines, Continental Airlines, Delta Air Lines and United Airlines had boosted their fares.

US Airways, Trans World Airlines and America West joined the pack Friday morning, making it likely that the increase would hold up. Carriers generally only rescind fare hikes if other major airlines decline to follow suit, said Bob Harrell of Harrell Associates, a consultant specializing in airline pricing trends.

Low-fare maverick Southwest Airlines Co. was the only major carrier that didn’t join in, making it likely the increases would not apply in Los Angeles and other markets where the airlines compete with discount carriers, Harrell said.

The round of increases came after Northwest refused to go along with two recent attempts by Continental, its U.S. alliance partner, to institute a fare increase that hit leisure travelers harder than Northwest’s increase.

Northwest also added another perk for leisure travelers Friday, reducing the prices of its lowest fares in certain markets, Harrell said.

Trans World Airlines and US Airways also had sales in effect for tickets purchased by midnight Friday.

Analysts said that the air fare seesaw is unlikely to end. Airlines tend to have fare sales about every six weeks, Harrell said.

“There’s this Pavlovian response [among consumers] that I’ll just wait until the next fare sale when I know what I’m going to do. The airlines have to respond to the consumer,” Harrell said.

The newest round of fare increases comes on top of a $20 round-trip fuel surcharge instituted earlier this year as airlines continue to struggle with jet fuel prices that have soared in the last year.

Although Northwest did not specifically link its new increase to fuel prices, fuel is Northwest’s second-largest expense, after salaries. Northwest spokesman Jon Austin said jet fuel is 20 to 30 cents a gallon higher than a year ago, and each penny of increase costs the airline $20 million a year.

Northwest shares fell 38 cents to close at $18.56 on Nasdaq.