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AIRLINES Northwest says no to raising passenger fares



Published: Thu, February 20, 2003 @ 12:00 a.m.



Airlines failed for the third time in 60 days to raise fares.

KNIGHT RIDDER NEWSPAPERS

FORT WORTH, Texas -- Despite their heavy financial losses, the major airlines abandoned on Monday their latest attempt to raise fares after Northwest Airlines refused to play along.

The fare increase began Friday, when Houston-based Continental raised ticket prices by $10 each way, to cover the rising cost of fuel. Most other major carriers, including Fort Worth-based American Airlines, matched the increase Friday or over the weekend, according to Tom Parsons, chief executive of Bestfares, an Arlington, Texas, firm that tracks airline ticket prices.

But as it has done several times recently, Northwest played the spoiler, refusing to increase its own fares. By 11 a.m. Monday, all of the other airlines had phased out the increase.

"This will be the third attempt to raise air fares in less than 60 days to fail," Parsons said.

Risk losing customers

American officials confirmed the price cut, but declined to comment further. Even though the airlines are losing millions of dollars every day, they don't want to lose customers to competitors that have cheaper fares, Parsons said.

So a single airline can scuttle any attempt to raise prices -- something Northwest has done consistently in recent months.

"With these tough economic times and the threat of war, no airline can make an air fare increase stick right now," Parsons said.

The six largest carriers lost nearly $11 billion last year, and expect to lose billions more in 2003.




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