Airlines raise fares by up to $10 each way

NEW YORK (Reuters) – U.S. airlines raised fares by up to
$10 one-way for tickets geared at business travelers, taking
advantage of robust demand at the tail end of the peak summer
travel season.

United Airlines, owned by UAL Corp., on Monday said it
initiated a domestic fare increase, raising by $5 each way
prices on tickets for flights of less than 1,000 miles and $10
for flights of more than 1,000 miles.

However, the carrier rescinded the fare increase, which was
put through on Friday, in markets served by low-cost carriers,
spokeswoman Robin Urbanski said.

Continental Airlines Inc., US Airways Group Inc., Delta Air
Lines Inc., and Northwest Airlines Corp. all matched the
increase, which is for fares purchased seven days or less in
advance, representatives of the airlines said.

U.S. airlines, helped by a cut in domestic capacity and
fuller planes, have been raising fares to offset the effect of
high fuel prices and boost profits. The most recent round of
price increases was about two weeks ago.

“Lacking any evidence of consumer resistance, our demand
bullishness only continues to strengthen,” said JP Morgan
analyst Jamie Baker in a note.

But airlines have also shown a readiness to cut prices on
certain routes in response to competition or to spur demand. US
Airways and Delta last week lowered some fares on their New
York to Boston routes by as much as 54 percent. Discount
carrier JetBlue Airways Corp. cut prices 18 to 34 percent for
some seats on flights this autumn, when travel demand generally
slackens.

(Reporting by Chris Reiter and Kyle Peterson; Additional
reporting by Paritosh Bansal)