Airlines raising domestic fares again

DALLAS (AP) - Major U.S. airlines are raising fares again, and the only question might be the size of the increase.

This is the sixth broad fare increase the airlines have tried this year. They are raising fares to cover higher jet fuel prices, and the strategy seems to be working.

US Airways said Thursday that if the trend toward higher revenue continues, it will be able to cover foreseeable increases in fuel costs.

In the latest fare hike, American Airlines raised fares on flights within the 48 contiguous states by $10 per round trip, spokesman Tim Smith confirmed on Thursday. Delta Air Lines boosted fares even higher — up $10, $14 or even $20 per round trip depending on flight length, according to spokesman Trebor Banstetter. The Delta increase was originally aimed at business travelers who buy last-minute tickets but was expanded to all fares after American's price hike.

United, Continental and US Airways matched American's increase but not the larger Delta hike, said Rick Seaney, CEO of FareCompare.com. He said none of the low-cost airlines — Southwest, JetBlue and AirTran — had raised prices.

All the jockeying has left the fate of this price increase up in the air. Airlines sometimes raise fares but then back off if key competitors don't raise their prices. Last week, fares went up $20 per round trip, but the increase was scaled back to $10 after some carriers balked at the bigger hike.

Some analysts think if prices go any higher, leisure travelers — and maybe a few corporate fliers — will just stay home. Hudson Securities analyst Daniel McKenzie said higher fares will cause companies to burn through their travel budgets, and they'll respond by freezing or reducing travel later this year.

Seaney doesn't share that view yet. "It is pretty clear that demand hasn't softened enough to prevent airlines from testing new highs for base domestic ticket prices," he said.

US Airways president Scott Kirby said Thursday that travel demand in February remained "exceptionally strong," allowing the company to generate enough revenue to offset higher fuel prices.

Traffic on Kirby's airline rose more than 4 percent and a key measure of revenue per mile rose 10 percent in February, compared with a year ago.