American, Delta Boost U.S. Fares by $10 Round Trip

The leading low-cost carriers, Southwest and JetBlue Airways Corp., said Friday they had not raised prices.


Several major carriers, led by American Airlines and Delta Air Lines Inc., are raising many U.S. fares by $10 per round trip, including business fares and advance-purchase tickets bought by leisure travelers.

A leading Wall Street analyst expects the fare increases will stick, unlike a failed effort to raise prices last week.

American, the nation's largest carrier, raised fares Thursday night on most of its routes except to and from Dallas, where it is locked in a fare war with Southwest Airlines Co. Delta raised fares broadly except where it competes with Southwest and other low-cost airlines.

Continental Airlines Inc. and US Airways Group Inc. both said Friday that they would match the higher fares. United Airlines was still considering the issue, but it raised other fares by up to $50 one-way; Northwest Airlines Corp. said late Friday it had matched the raise.

The leading low-cost carriers, Southwest and JetBlue Airways Corp., said Friday they had not raised prices.

At the same time, American cut fares to and from the Dallas area to compete with a fare sale announced Wednesday by Southwest.

If Thursday night's increase sticks, it would be the 22nd broad fare increase by U.S. airlines in the past two years, said Jamie Baker, an analyst with J.P. Morgan.

Low-cost carriers have balked at some fare increases, occasionally causing the older traditional airlines such as American and Delta to rescind increases. But this time, most of the increases are on routes not flown by the discount carriers, meaning they can't play spoiler, Baker said.

As a result, Baker gave the latest fare boost "a high probability of success."

Airlines have cited rising fuel costs for most of their previous fare hikes, but fuel prices have eased in recent weeks, from $2.30 per gallon in early August to about $1.66 per gallon this week on the Gulf Coast spot market. Still, a spokesman for American Airlines said fare increases never caught up to rising fuel costs.

"We're still trying to get to the point where revenue covers our expenses," said the spokesman, Tim Wagner. "Fuel is still really high."

Likewise, Delta spokeswoman Betsy Talton said her airline raised fares "in response to increased cost pressures."

UAL Corp.'s United Airlines was still considering a broad increase, but separately it raised last-minute fares on about 50 routes by $25 to $50 each way, said spokeswoman Robin Urbanski. The airline competes with Southwest on many of those routes, she said.

Last week, United had to back off an announced fare increase after some carriers balked.

American on Thursday cut fares as low as $39 one-way to and from the Dallas area in response to a fare sale announced Wednesday by Southwest.

American's lowest prices apply to flights between Dallas and nearby cities such as Austin. The lowest one-way fares, based on advance purchase of round-trip tickets, rise to $79 or $89 to more distant cities such as Philadelphia and Las Vegas.

American and its American Eagle regional airline fly out of Dallas-Fort Worth International Airport and Dallas Love Field.

A new federal law relaxed restrictions at Love Field, allowing Southwest to sell tickets for one-stop travel between Dallas and far-flung U.S. cities. Since then, Dallas-based Southwest and American Airlines, a unit of Fort Worth-based AMR Corp., have waged a fare war for North Texas travelers.

Both airlines limit the number of seats sold at the cheapest prices.

In trading on the New York Stock Exchange, AMR shares fell 9 cents to $27.22, Continental shares lost 28 cents to $34.52, and Southwest fell 13 cents to $14.62. UAL shares fell 26 cents to $34.77 and JetBlue shares gained 5 cents to $12 on the Nasdaq Stock Market.


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