Thursday, November 25, 1999
Delta joins in boosting air fares 4%
But Northwest may force retreat
BY AMY HIGGINS
The Cincinnati Enquirer
In the midst of the busiest travel week of the year, Delta Air Lines Inc. has raised business and leisure fares 4 percent. If other airlines follow and the fare hike sticks, it would be the fifth this year.
But Northwest Airlines officials say they have no plans to join Delta and other major airlines in raising fares.
If Northwest doesn't change its position, history says the hike likely will be rescinded, Kenwood travel agent Lee Gentry said Wednesday.
“That's been the trend,” said Mr. Gentry, co-owner of Travel King. “Chances are it won't end up going through without Northwest.”
But travel agent M. Vicky Mary, owner of Hyde Park's Victoria Travel, foresees fares going higher because of rising oil prices. She and other agents say whichever way full fares go, they rarely affect sale fares and therefore consumers' actions.
The hold that Northwest — the nation's fourth largest airline — has over the others is evident when looking at the last two years. Several industry-
wide hikes were stymied last year when Northwest refused to go along, and more than a dozen failed this year alone.
For antitrust reasons, airlines cannot confer about rates. However, for competitive reasons, they closely monitor each others' prices and typically match them dollar-for-dollar.
Not wanting to give a competitor a price advantage, airlines will roll back fare hikes (or match discounts and reductions) when even one seems to offer customers a better deal.
American Airlines, No. 2 in the United States, initiated this most recent price increase late Monday, as oil prices have jumped to their highest level since the 1991 Persian Gulf War. Fuel accounts for an airline's third-largest expense, behind labor and the cost of the plane itself.
United and Continental, the country's largest and fifth largest carriers, respectively, joined the fare increase Wednesday.
Delta matched the increase Tuesday.
Airline spokeswoman Alesia Watson said the hike was “based on demand and the competitive environment.”
Delta joins in boosting air fares 4%
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