Airlines pull back on higher airfares

By Trebor Banstetter
Knight Ridder News Service

FORT WORTH, Texas — Despite their heavy financial losses, the major airlines yesterday abandoned their latest attempt to raise fares after Northwest Airlines refused to play along.

The fare increase began on Friday, when Houston-based Continental raised ticket prices by $10 each way, to cover the rising cost of fuel. Most other major carriers, including Fort Worth-based American Airlines, matched the increase on Friday or during the weekend, according to Tom Parsons, chief executive of Bestfares, an Arlington firm that tracks airline ticket prices.

But as it has done several times recently, Northwest played the spoiler, refusing to increase its fares. By 11 a.m. yesterday, all of the other airlines had phased out the increase.

"This will be the third attempt to raise airfares in less than 60 days to fail," Parsons said.

American officials confirmed the price cut, but would not comment further. Even though the airlines are losing millions of dollars every day, they don't want to lose customers to competitors that have cheaper fares, Parsons said.

So a single airline can scuttle any attempt to raise prices — something Northwest has done consistently in recent months.

"With these tough economic times and the threat of war, no airline can make an airfare increase stick right now," Parsons said.

The six largest carriers lost nearly $11 billion last year, and expect to lose billions more in 2003.