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Airlines try to hike fares. But will they stick?

By Samantha Bomkamp

AP Airlines Writer

POSTED:
LAST UPDATED: 06:55 a.m. HST, Oct 19, 2011


 

NEW YORK >> Holiday travelers may want to lock in airfares while they still can. At least two U.S. airlines are raising prices for the first time since late summer and others may follow.

Delta Air Lines Inc. raised one-way fares by $4 to $10 across most of their U.S. routes late Tuesday, according to Rick Seaney of Farecompare.com. Soon after, United Continental Holdings Inc. matched the increases. It's the first widespread fare increase attempt since early August and the 17th try this year.

The increase may not stick. Airlines often roll back fare increases if enough competitors don't match them. A recent attempt to raise prices in smaller cities met resistance, Seaney said.

Of the 16 previous attempts to increase prices this year, half of them failed. The eight that succeeded have brought average fares up by $58 to $70, said Citi analyst Will Randow.

Some travelers may avoid higher fares by taking advantage of fare sales. Many airlines recently matched a winter fare sale from Southwest that runs through Thursday. It excludes most peak travel days around Thanksgiving and Christmas.

The current fare hikes come as airlines begin reporting third-quarter financial results. Raising prices can send a positive signal to investors because it's a sign of strong demand and helps airlines' earnings.

Still, higher fares weren't enough to prevent another loss at American Airlines parent AMR Corp., which it blamed on higher fuel costs. On Wednesday AMR reported it lost $162 million in the third quarter — its fourth straight losing quarter. Southwest Airlines Co. is set to report results Thursday morning.






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