Continental, other airlines cancel planned fare increase

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Continental, other airlines cancel planned fare increase

HOUSTON (AP) =97 After announcing they were raising fares by $20 per round=
=20
trip to offset higher fuel prices, Continental Airlines and other carriers=
=20
have backed off. Houston's Continental, the No. 5 U.S. carrier, began the=20
price hike Friday on all routes, but Northwest Airlines only matched the=20
hike on certain routes Saturday, and by Monday all the majors had abandoned=
=20
the increase. Executives had said Continental spends more than $1 billion a=
=20
year on fuel and the cost has been rising rapidly because of the run-up in=
=20
crude oil prices. They are at their highest levels since October 2000.=20
After Continental's initial move, Fort Worth, Texas-based American Airlines=
=20
followed along with Delta, United, US Airways, American Trans Air, Midwest=
=20
Express and America West airlines. But Continental pulled back on the=20
increase because of the highly competitive air travel environment. The=20
airlines collectively have lost almost $15 billion during the past two=20
years. The latest rate hike attempt was major airlines' third during the=20
last 60 days, said Tom Parsons, chief executive of Bestfares.com. Parsons=20
said a fare increase may only come when Northwest initiates it. He noted=20
that the airlines have never experienced such challenges, including their=20
current financial situations plus the combination of a potential war and=20
the sluggish economy. "I don't think any of the major airlines have faced=20
this many dilemmas in a single year," Parsons told the Houston Chronicle in=
=20
Tuesday's editions. "They might be able to combat one, maybe two, but this=
=20
has got to be a nightmare for the pricing people and yield management=20
people, and management itself."


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