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Delta leads new round of airline fare hikes

Posted on: Friday, 17 March 2006, 15:48 CST

NEW YORK (Reuters) - Major U.S. airlines raised fares on most domestic routes by $5 each way on Friday, matching a fare hike pushed through on Thursday by bankrupt carrier Delta Air Lines Inc..

Continental Airlines Inc., US Airways Group Inc., JetBlue Airways Corp. and Northwest Airlines Corp. all said they had matched the Delta increase.

"Delta continues to respond to the increasing cost pressures on our business, including fuel," said Delta spokeswoman Chris Kelly.

U.S. carriers have been increasingly aggressive in boosting prices to recover profits which had been decimated by higher fuel prices and an oversupply of available seats.

That is bad news for U.S. consumers used to low ticket prices but good news for the airlines, many of which could pull out of the red this year after several years of losses.

Leading discount carrier Southwest Airlines Co. raised fares last Friday and several other airlines matched that hike on overlapping routes.

The latest increase was on routes where Southwest, which has used fuel price hedges to keep fares relatively low, does not compete, said JP Morgan analyst Jamie Baker, who first disclosed the latest fare hike in a research note.

Baker said AMR Corp.'s American Airlines and UAL Corp.'s United Airlines, the largest and second-largest U.S. carriers, also matched the increase. Neither immediately returned phone calls seeking comment.

Source: REUTERS

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