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Airlines renew push on business fare hikes

Posted by Paul Makishima, Globe Assistant Sunday Editor  February 22, 2011 02:05 PM

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Last week, lead by Delta Airlines, major carriers made an unsuccessful run at raising a series of rates aimed at business travelers.They were forced to back down after US Airways quickly dropped the increases, sparking a domino effect. The hikes focused on first-class, business-class, and 7-day advance-purchase tickets, which are used most heavily by corporate travelers.

Now fare watchers are saying that American, United, Continental and US Airways pushed fares up by $20 to $60 per round trip on some tickets favored by business travelers -- about half the size of the increases sought last week. The airlines, which have seen fuel prices leap by about 50 percent in the past year, are going after corporate customers because they tend to be less sensitive to price hikes.

This from the Associated Press;

American Airlines spokesman Tim Smith confirmed that his airline raised prices at midday Monday, adding that he believed American was the first carrier to do so. US Airways confirmed matching the increase. Representatives of United Continental Holdings Inc. did not comment immediately.

Delta Air Lines remained a key holdout Tuesday morning. If even one major airline refuses to go along, fare increases can collapse. That's what happened last week to a Delta-led effort to boost high-end tickets by $40 to $120 per round trip -- US Airways first matched that increase and then abandoned it.

JPMorgan Chase analyst Jamie Baker predicted Delta would match the latest increase. Delta did not immediately respond to a request for comment.


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