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Airlines hike fares again
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June 1, 1999: 7:15 p.m. ET
Continental leads pack of majors to third fare hike in '99 as summer season dawns
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ATLANTA (CNN) -- Air fares are going up for summer vacation and other leisure travel.
United Air Lines, a unit of UAL Corp. (UAL), Delta Air Lines (DAL) and America West (AWA) on Tuesday joined the other major airlines in raising domestic ticket prices for non-business travel by 4 percent.
It's the third time the industry has raised leisure fares this year -- for an overall 11 percent rise, a result of consistently strong consumer demand for seats during a period of peak economic prosperity.
Flying round-trip between Newark and Los Angeles on Continental (CAL) will cost $24 more, or $626. A 14-day advance ticket for a Continental round-trip from Houston to Seattle went up $30 to $791.
Continental first raised its fares Friday, and over the weekend that increase was joined by American, a unit of AMR Corp. (AMR), US Airways (U), TWA (TWA) and Northwest (NWAC), the industry bellwether on fare increases.
Fares are going up, said Northwest spokesman Jon Austin, "because the market can support it. People will not refuse to travel due to higher rates."
One of the few holdouts was Southwest (LUV). "We are not going along with the fare hike," a spokesman told CNN.
Airline industry analyst Terry Trippler, who publishes "The Airfare Report," said fares will continue to rise as more people fly. But leisure fares are going up more than in the past, he said.
"Airlines are losing money on special rate deals with businesses and Internet fares, so they have to pick up the slack somewhere and are doing so at the pleasure travelers expense," Trippler said.
Summer is traditionally the peak season for airline travel, and carriers know their planes will be booked, and that they can afford to push through a fare increase.
The price hike narrows the huge gap between leisure fares and more profitable business fares that have risen 42 per cent in the last three years while leisure fares have fallen 4 percent.
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