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Airlines flex pricing power with fare hikes.

Publication: Business Travel News
Publication Date: 14-AUG-06 		Format: Online
Delivery: Immediate Online Access

Article Excerpt
With capacity and demand on their side, domestic carriers have pushed through a series of fare increases this year--with two in the past three weeks alone. In addition to published fares that have grown by double-digit percentages in the past year, buyers face resistance among carriers on striking contracts that mitigate the increases.

United Airlines led the most recent, spurring other legacy carriers to match the $5 to $10 increases on one-way fares.

"The increase was more orientated towards business fares," Calyon Securities analyst Ray Neidl said in a research note, adding that JetBlue in certain markets matched, yet other low-cost carriers did not. Prior to that, Delta in late July initiated a $5 increase on most domestic one-way fares and other carriers since have chimed in. Delta said the increase is to offset surging fuel costs.

Citing data from the first week in August, Harrell Associates airfare consultant Bob Harrell last week said, "Both...

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