Southwest leads airfare increase

Southwest Airlines Co. led the nation's seven largest carriers in boosting fares over the weekend to help offset rising fuel prices, which a report released Monday said helped push costs for U.S. airlines substantially higher in the first quarter.

United Airlines, American Airlines, Delta Air Lines, Continental Airlines and Northwest Airlines matched Southwest in raising round-trip fares by as much as $20. US Airways broadened the increase to markets where it doesn't compete with Southwest.

U.S. airlines want to help blunt a rise in the price of jet fuel in the past three months and take advantage of record summer travel demand. Carriers have failed in some recent widespread attempts to lift fares when Southwest and other discounters didn't take part.

"When Southwest chooses to push fares higher, we do sit up and take notice," Jamie Baker, a JPMorgan Chase & Co. analyst, said in a report Monday.

It is the third fare increase this year by Southwest, the biggest discount carrier and sixth-largest overall. The airline boosted prices six times in 2006 as its fuel bill surged 59 percent, to $2.14 billion. Fuel is Southwest's second-largest expense, after labor. The carrier said in June that it was scaling back growth plans, cutting unprofitable routes and seeking more business travelers.

"It's still about costs," Southwest spokeswoman Beth Harbin said Monday.

Southwest raised some one-way tickets for flights of more than 1,250 miles by $10, or $20 round trip. It also boosted other round-trip fares by $2 to $10 based on distance, Harbin said.

US Airways raised fares across its entire system, not just on routes where it overlaps with Southwest. US Airways boosted prices $5 each way for flights of more than 1,000 miles, with increases of $2 to $6 round trip on shorter routes.

Meanwhile, a study by the Air Transport Association said rising fuel prices led to a 10.6 percent jump in first-quarter costs for carriers compared with a year ago. Jet fuel rose 12.6 percent, averaging $2.06 a gallon.

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