United Airlines' airfare increase loses altitude

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Associated Press

Posted on October 11, 2012 at 3:12 PM

Updated Thursday, Oct 11 at 4:02 PM

DALLAS (AP) — The latest attempt by airlines to raise fares appears to be collapsing.

Delta Air Lines said Thursday that it rolled back an increase of $4 to $10 per round trip on many U.S. routes. Delta had raised prices to match an increase started by United Airlines.

J.P. Morgan analyst Jamie Baker says the increase is unraveling because it gained only limited support from a few other carriers — American, Alaska and US Airways. He says airlines have tried 12 fare hikes this year but only four have succeeded.

Airlines often abandon price increases when key competitors such as Southwest Airlines don't match them, because consumers will change airlines for even a few dollars in savings.

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