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Carriers back down on business-class hikes

Posted by guest  February 17, 2011 11:51 AM

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Amid rising fuel prices, Delta Air Lines and its peers earlier this week kicked up a series of rates aimed at business travelers, a much-valued sweet spot for the airlines given that corporate clients tend to be a little less sensitive to prices and economic downturns than leisure customers.

The increases tended to focus on first-class, business-class, and 7-day advance-purchase tickets, which are used most heavily by corporate travelers.

But now the carriers, who are always looking over their shoulders at their competitors, apparently have backed down. This from the Associated Press:


[F]are trackers say that US Airways had second thoughts and dropped the increase on Wednesday.
Rick Seaney of FareCompare.com said Thursday that United and Continental then completely rolled back their increases, while Delta and American scaled back their hikes.
Jamie Baker, an analyst for JPMorgan Chase, said he was surprised that US Airways blocked the latest Delta increase after first matching it. US Airways did not immediately respond to requests for comment.
Even though the Delta increase targeted corporate travelers who usually worry less about price, Baker said evidence is growing that many passengers may not be willing to pay higher fares. He noted that Southwest Airlines recently blocked a fourth effort to raise fares.

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