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Aug 7
United, Continental, Delta, and Northwest Push Through Fare Increases
Airlines are banking on squeezing out every penny they can for the last few weeks of the summer travel season as August can see slower demand.  The parent of United Airlines, UAL Corp., (UAUA) was the first airline to push through the fare increase.  Fares were hiked $5 one way on routes shorter than 1,000 miles and $10 on fares that were over 1,000 miles.  United then took back the fare increase on which they compete with low cost carriers such as Jetblue, Southwest and Frontier. 

Other major carriers such as Continental, Delta and Northwest all matched the fare increases. 

"Lacking any evidence of consumer resistance, our demand bullishness only continues to strengthen," said JP Morgan analyst Jamie Baker in a note.

But airlines have also shown a readiness to cut prices on certain routes in response to competition or to spur demand. US Airways and Delta last week lowered some fares on their New York to Boston routes by as much as 54 percent. Discount carrier JetBlue Airways Corp. cut prices 18 to 34 percent for some seats on flights this autumn, when travel demand generally slackens.

Reuters.com

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