Airlines Find Some Relief

AMR's (AMR Quote) American Airlines kicked off the surcharge Wednesday by increasing fares $5 each way in selected markets.

But Northwest Airlines upped the ante Thursday morning, boosting ticket prices $10 each way on longer flights in the U.S. and Canada and $5 each way on flights shorter than 1,000 miles. Northwest cited higher fuel prices and the approach of peak summer booking season.

After Northwest's move, other big U.S. carriers followed: Delta Air Lines, Continental (CAL Quote) and UAL's (UALAQ Quote) United Airlines.

US Airways (UAIRQ Quote) largely matched the increase, except on its discount GoFares, which account for 30% of all flights, a spokeswoman said.

Even some discount carriers jumped into the pool, including AirTran (AAI Quote) and America West, although AirTran raised all its fares by only $5 each way.

Not surprisingly, the two holdouts are low-cost heavyweights Southwest and JetBlue. Southwest is known for not joining in industry fare hikes, and a Southwest spokeswoman said Monday morning the carrier had not raised fares. JetBlue did not return a call in time for this story, but other industry participants said the airline had not joined the fare hike by Monday morning.

The latest industry hikes will stick in less-competitive markets that lack low-cost carriers, said Tom Parsons, the chief executive of Bestfares.com, which monitors industry pricing.

"In noncompetitive markets like Dallas-Fort Worth to Syracuse, N.Y., every single air fare took the $10-dollar hit each way," Parsons said. "Not one low-cost carrier flies there."

Southwest fares may rise soon, although perhaps not as much as the latest industry hike. "Southwest typically avoids the fare-increase limelight, choosing instead to spread an increase over smaller initiatives -- usually just a few hundred markets at a time and usually by no more than $3 one-way," wrote J.P. Morgan's Baker. "Southwest's last spurt of activity occurred in October of 2004, prior to which increases occurred roughly every five months or so. We would not be surprised to see Southwest gradually begin raising fares as the summer peak approaches."