Competitors Match American Fare Increase

A fare increase launched by American Airlines appeared to stick on Friday, as Northwest Airlines Corp., Delta Air Lines Inc., and Continental Airlines Inc. said they, too, would raise fares in most U.S. cities.


MINNEAPOLIS (AP) -- A fare increase launched by American Airlines appeared to stick on Friday, as Northwest Airlines Corp., Delta Air Lines Inc., and Continental Airlines Inc. said they, too, would raise fares in most U.S. cities.

American blamed fuel prices when it announced fare increases of $5 one-way and $10 round-trip on most domestic and U.S.-Canada flights on Thursday. It was the latest among several fare hikes by U.S. airlines in recent months. Some stuck when competitors matched them; others were abandoned.

Northwest spokesman Kurt Ebenhoch said the airline matched American except in markets where they offer fares to compete with Southwest Airlines Co. and JetBlue Airways Corp. Northwest also didn't raise its higher-priced walk-up business fares, he said.

Continental and Delta also acknowledged matching the increases Friday afternoon.

American said it needs the higher ticket prices to offset high fuel costs. American, a unit of Fort Worth-based AMR Corp., has said that each $1 increase in the price of a barrel of oil costs it about $80 million a year.

Rising fuel prices have bedeviled most airlines this year. Southwest has been an exception, making heavy use of financial hedges to lock in lower prices, including 85 percent of its fuel for the rest of this year at prices that are about half the going rate. Northwest and Delta both said they have no fuel hedges in place.

Northwest Chief Executive Doug Steenland blamed fuel prices as one of the factors in the $458 million loss it reported last week - its largest quarterly loss ever. Several other airlines also blamed fuel prices in reporting results this month, when combined losses at the six so-called legacy carriers reached $33 billion since 2001.

Airline stocks rose on Friday as oil prices slid. AMR shares rose 36 cents, or 3.6 percent, to close at $10.47, Continental shares rose 8 cents to $11.84, Delta shares rose a penny to $3.29, and Southwest Airlines 30 cents, or 2.1 percent, to $14.88 on the New York Stock Exchange. Northwest shares rose 13 cents, or 2.6 percent, to close at $5.18, and JetBlue rose 15 cents to close at $20.05 on the Nasdaq Stock Market.

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