Thursday, October 20, 2011

Airlines try to hike fares: Will they stick?

Holiday travelers may want to lock in airfares now, because they're going up.

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At least two U.S. airlines are raising prices for the first time since late summer and others may follow.

Delta Air Lines Inc. raised one-way fares by $4 to $10 across most of their U.S. routes late Tuesday, according to Rick Seaney of Farecompare.com. Soon after, United Continental Holdings Inc. matched the increases. It's the first widespread fare increase attempt since early August and the 17th try this year.

The increase may not stick. Airlines often roll back fare increases if enough competitors don't match them. A recent attempt to raise prices in smaller cities met resistance, Seaney said.

Of the 16 previous attempts to increase prices this year, half of them failed. The eight that succeeded have brought average fares up by $58 to $70, said Citi analyst Will Randow.

The current fare hikes come as airlines begin reporting third-quarter financial results. While higher ticket prices annoy travelers, they send a positive signal to airline investors because it's a sign of strong demand.

Still, higher fares weren't enough to prevent another loss at American Airlines parent AMR Corp., which blamed it on high fuel costs. On Wednesday AMR reported it lost $162 million in the third quarter ? its fourth straight losing quarter. Southwest Airlines Co. is set to report results Thursday morning.

Some travelers may avoid higher fares by taking advantage of fare sales. Many airlines recently matched a winter fare sale from Southwest that runs through Thursday. It excludes most peak travel days around Thanksgiving and Christmas.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: http://www.msnbc.msn.com/id/44961075/ns/travel-news/

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