Fare Increases Might Not Take
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Two major airlines followed Continental Airlines Inc. in raising leisure fares, but some analysts said an effort to hike prices industrywide will probably fail.
AMR Corp.’s American Airlines and Delta Air Lines Inc. said they increased most leisure fares to match Continental’s $20 per round-trip hike. But Northwest Airlines Corp., UAL Corp.’s United Airlines and US Airways Group matched only some increases.
Northwest has held out against previous systemwide fare increases, forcing competitors to roll theirs back or face a pricing disadvantage.
The fare-increase attempt, the third since mid-April, was “dead on arrival,” given Northwest’s action to match the increase on a very limited number of markets, said J.P. Morgan Chase analyst Jamie Baker.
But Terry Trippler, an airfare expert at Trippler & Associates, disagreed. “My gut feeling is that Northwest and United will collapse and go along with [the increase] this weekend,” Trippler said.
Major U.S. carriers have tried unsuccessfully several times to increase fares industrywide since the Sept. 11 attacks.
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