United, Delta, American raise fares

By Mary Schlangenstein
Bloomberg News Service

FORT WORTH, Texas — American Airlines, United Airlines and Delta Air Lines Inc. raised leisure fares $20 round trip in at least the fourth attempt since mid-April to boost ticket prices and help stem losses.

Northwest Airlines Corp., which often has been the spoiler in increase attempts, doesn't plan to go along with the latest effort to raise prices, said spokesman Kurt Ebenhoch.

Airlines usually scuttle higher fares if rivals don't follow, because of the competitive disadvantage. The latest increase comes in the busy summer travel season, just before the July 4 holiday weekend.

"If they (Northwest) are saying no, the price increase is not going to stick," said James Corridore, a Standard & Poor's analyst. "Airlines can't price themselves higher than one of their largest competitors."

AMR Corp.'s American, the world's largest airline, initiated the increase, said Tom Parsons, chief executive of Bestfares.com.

UAL Corp.'s United and Delta, the second and third biggest, said they matched it. Airlines cut fares to try to revive demand after the Sept. 11 attacks, and that contributed to combined losses of $7.3 billion last year and $2.4 billion in the first quarter.

Houston-based Continental Airlines Inc. and Arlington, Va.-based US Airways Group Inc. said they didn't match the increase. America West Airlines, which changed its fare structure in March, said it doesn't expect to follow American's move.

"The traveling public considering the purchase of leisure fares needs to be careful these next few days," said Parsons, whose company monitors fares. "A family of four could save $80 round trip by being selective about the air carrier."

The fare increase comes as most airlines said June passenger traffic fell from a year earlier.