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After pause, airlines seeking to raise fares again

By Associated Press

LAST UPDATED: 01:28 p.m. HST, Jul 16, 2011


DALLAS >> Some of the nation's largest airlines said Friday they raised fares by up to $10 per round trip, the first broad increase in three months.

Sister airlines United and Continental raised prices on many U.S. routes by $4 to $10 per round trip, and Delta matched the increase, spokesmen for the airlines confirmed.

Officials at American Airlines and JetBlue Airways said they had not raised prices. Other airlines did not comment immediately.

U.S. airlines raised domestic prices a half-dozen times in early 2011 to boost revenue and cover rising jet fuel costs, but the last broad increase was in April. During the past two weeks some airlines reported an increase in empty seats in June compared with a year ago. Also, low-cost carriers including Southwest ran sales for fall, when travel demand drops.

Rick Seaney, CEO of FareCompare.com, said United and Continental appeared to be testing whether other airlines believe that demand is strong enough to raise prices again.

Jamie Baker, an analyst with JPMorgan Chase, said concern about sagging demand has depressed airline stocks recently. He said the price increases showed confidence about demand that might give the stocks a boost.

"You don't raise fares when demand is weak," Baker said.

In trading Friday, shares of United Continental Holdings Inc. fell 35 cents to close at $20.85; Delta Air Lines Inc. dipped 10 cents to $8.41; American parent AMR Corp. lost 8 cents to $5.01; Southwest Airlines Co. slipped 3 cents to $10.72; US Airways Group Inc. lost 20 cents, or 2.6 percent, to $7.44; and JetBlue Airways Corp. was unchanged at $5.61.

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