Biggest U.S. carriers rescind $10 fare hike

The five largest U.S. airlines on Monday pulled back a $10 round-trip fare increase in domestic markets where they compete with discount rivals. US Airways became the first major carrier to withdraw the boost systemwide.

American Airlines, United Airlines, Delta Air Lines, Continental Airlines and Northwest Airlines rescinded the increase in some areas after low-fare carriers, such as Southwest Airlines, didn't join in raising prices starting May 10.

The pullback reflected the difficulty in making higher fares stick, with discounters available to about 78 percent of U.S. fliers, said LECG LLC economist Darin Lee in Cambridge, Mass. To stay competitive, airlines usually scrap increases that aren't matched by others.

"The domestic markets don't seem to have the ability to sustain increases," said Neil Bainton of FareCompare.com, a Web site that tracks ticket prices. "It would be natural for them to go up at this time of year" as travel demand grows.



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