Carriers Continue to Raise Airfares

If you haven't bought airline tickets since February, brace yourself for sticker shock.

Leisure round-trip airfares in many domestic markets have jumped by as much as $60 over the past five weeks as airlines have implemented a host of broad price increases for the first time in more than a year.

The most recent came Friday, when most airlines, including Fort Worth-based American Airlines, raised most round-trip domestic fares by $10.

"We did match the fare increase of those other airlines," said Tim Smith, an American spokesman.

In the past, most fare increases have been repealed within days when one or more airlines didn't participate. Because the industry is so highly competitive, fare prices typically don't rise unless all the major airlines increase them at the same time.

But that was before oil prices rose above $55 per barrel. Because jet fuel is one of airlines' biggest expenses, the high fuel prices have cost the large carriers billions of dollars.

That makes it far more tempting for the entire industry to raise revenue by raising fares.

The biggest increases have been on routes where the major hub airlines don't compete with discount airlines like Southwest Airlines or AirTran Airways, said Tom Parsons, chief executive of Bestfares.com, an Arlington-based Internet travel site that tracks ticket prices.

"We're seeing these airfares stick only on noncompetitive routes, where leisure travelers are already facing the highest airfares in America," he said. "Those fares can be double the cost of fares on similar routes served by Southwest Airlines" or other low-fare carriers, he said.

But some discount airlines have also raised fares. On Friday, low-fare carriers America West and ATA Airlines matched some of the higher fares. And Dallas-based Southwest recently implemented a fare increase.

The higher fares have apparently helped American. Last week, the airline reported that its first-quarter revenue will be up by as much as 4 percent compared with last year, far more than expected.

Some analysts said the round of fare increases was a factor in boosting the airline's revenue.

Shares of AMR Corp., parent of American Airlines, (ticker: AMR) closed at $10.45 per share, down 25 cents, Friday. Southwest shares (LUV) closed at $14 per share, down 24 cents.

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