whaledriver
Advanced
- Jan 20, 2003
- 140
- 0
WSJ: Northwest Airlines kills industrywide fare hike
An attempt by major airlines to raise fares $20 per round-trip ticket fell apart over the weekend as Northwest Airlines refused to go along, The Wall Street Journal is reporting Tuesday.
The fare increase was launched by Northwest''s marketing partner, Continental Airlines, which raised prices Friday on both leisure and business tickets.
At least seven other carriers raised prices in step with Continental. But by Sunday night, with Northwest unmoved, both American Airlines and United Airlines rolled back their prices. By Monday morning, all airlines had rolled back prices.
Northwest operates three daily nonstop flights out of Piedmont Triad International Airport.
The fare jockeying marked the third failed attempt to raise prices in the past 60 days. Houston-based Continental said Friday that it needed higher prices to help cover the higher cost of jet fuel, which is the second-largest expense for an airline after labor. The company said recently in a Securities and Exchange Commission filing that it is losing $1.5 million a day in the first quarter.
The nine U.S. majors suffered net losses of more than $11 billion last year and red ink is expected to continue this year, especially if a war with Iraq keeps travelers at home.
To fill empty seats carriers have had to resort to widespread discounting, bringing fares to 15- to 20-year lows.
An attempt by major airlines to raise fares $20 per round-trip ticket fell apart over the weekend as Northwest Airlines refused to go along, The Wall Street Journal is reporting Tuesday.
The fare increase was launched by Northwest''s marketing partner, Continental Airlines, which raised prices Friday on both leisure and business tickets.
At least seven other carriers raised prices in step with Continental. But by Sunday night, with Northwest unmoved, both American Airlines and United Airlines rolled back their prices. By Monday morning, all airlines had rolled back prices.
Northwest operates three daily nonstop flights out of Piedmont Triad International Airport.
The fare jockeying marked the third failed attempt to raise prices in the past 60 days. Houston-based Continental said Friday that it needed higher prices to help cover the higher cost of jet fuel, which is the second-largest expense for an airline after labor. The company said recently in a Securities and Exchange Commission filing that it is losing $1.5 million a day in the first quarter.
The nine U.S. majors suffered net losses of more than $11 billion last year and red ink is expected to continue this year, especially if a war with Iraq keeps travelers at home.
To fill empty seats carriers have had to resort to widespread discounting, bringing fares to 15- to 20-year lows.
