Posted by: Five Star Travel & Cruises | April 6, 2011

Airlines scale back latest fare increase

Thanks to Southwest airlines refusal to go along with price increases the other airlines have scaled back because they can’t compete while having their current rate hike. Associated press reporting.

DALLAS (AP) – Most major U.S. airlines sharply scaled back their latest price increase on routes where they compete with low-fare giant Southwest, which declined to go along with the higher fares.

Delta Air Lines Inc., for example, dropped a $10 round-trip increase on about 60 percent of the routes where it hoped to boost prices, JPMorgan Chase analyst Jamie Baker said Monday.

The airlines have raised base prices and business fares several times in 2011 as they struggle with higher fuel costs. Spot prices for jet fuel have risen about 50 percent since September.

United and Continental started the latest $10 increase late last week. They were matched by Delta and American and partly by US Airways. Low-fare carriers JetBlue and Virgin America also raised prices over the weekend, according to fare experts.

Southwest Airlines Co., however, remained a holdout.

The Dallas-based airline has been focused in recent days on inspecting about 15 percent of its fleet after an older Boeing 737 sprung a hole in the roof Friday and had to make an emergency landing in Arizona. Southwest found cracks in the aluminum skin of three more planes as of late Monday.

Baker said Southwest usually prefers to raise prices over long weekends and might do so around Easter.

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