Fare Increase By American, Delta and Continental

On October 31, I reported that an airline rate hike was canceled. Two of the four airlines mentioned in that report have raised rates on many routes by $10 per round trip this week, which is higher than the failed raise of last week.

American, Delta and Continental have raised rates where competition against low-cost airlines was weak.

The airline wars are heating up. Though American Airlines raised its rates on many flights, it was forced to slash rates for some short flights out of Dallas, because of fierce competition from Southwest Airlines.

Last week’s increase was old news within hours. However, this week’s increase could stick, according to J.P. Morgan Analyst Jamie Baker.

Without the competition from the low-cost airlines, these rates are likely to succeed, Baker said.

American Airlines has raised fares 22 times in the past two years, Baker said.