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Friday, July 15, 2005 - Page updated at 01:17 PM
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Trains, buses and roads. U.S. airlines boost fares aimed at business travelers The Washington Post WASHINGTON — Pressured by high fuel costs, Delta Air Lines Inc. has raised its cap on some of its ticket prices by $100, prompting several other airlines to boost their fares. The nation's carriers have increased fares seven times this year, the highest number of annual hikes in nearly a decade. Average fares for summer and fall are up 10 to 15 percent from last year, according to airfare expert Terry Trippler of Cheapseats.com. With fuel prices continuing to escalate and airlines' financial gloom lingering, more fare increases are likely on the horizon, Tippler said. Next summer, ticket prices could be another 20 percent higher, he predicted. "If you see a cheap fare for the holidays now, you better grab it," Trippler said. Following Delta's announcement Thursday, other airlines including United, Continental and U.S. Airways matched UAL Corp.'s United, US Airways Group Inc. and Continental Airlines Inc. immediately matched the increase. Even low-cost carriers such as Southwest Airlines Co. have raised ticket prices this year. Southwest said Thursday its second quarter earnings rose 41 percent from the year before because of stronger ticket sales and its hedging of fuel prices. Delta's most expensive fares — those for last-minute, walk-up tickets — rose to $599 each way in coach and $699 each way in first class. In January, Delta surprised the industry by capping its most expensive fares at $499 and $599 each way. The airline also eliminated its Saturday night stay requirement. Thursday's fare increases, which primarily affect business travelers who purchase last-minute tickets, do not reverse the easing of the Saturday night rule. Paul Matsen, Delta's senior vice president and chief marketing officer, said the earlier fare restructuring was launched when crude oil was selling at $43 a barrel, compared with $61 a barrel recently. "Despite our best intentions to keep the current fare caps in place, we have been forced to find ways to offset this dramatic spike in costs," Matsen said. Delta, the nation's third-largest carrier, is expected to lose about $350 million in its second quarter largely because of fuel prices and increased competition from low-cost carriers, according to Thomson First Call. The airline, which has been on the brink of filing for Chapter 11 bankruptcy for nearly a year, lost $1.1 billion in the first quarter — more than any other carrier.
Since then, several airlines have raised fares to force Delta to back away from the cap, but until yesterday, Delta had refused. Some fare hikes have failed to stick. Last month, Northwest tried raising its prices as much as $50 each way but had to back down when other airlines refused to match the move. Copyright © 2005 The Seattle Times Company
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