Northwest Airlines' latest attempt to raise fares and change ticketing rules appeared to be unraveling today, according to analyst and media reports. The carrier Tuesday night raised by $50 many one-way business fares that since January have been capped at $499, added $5 each way to fares competitive against low-cost carriers and changed minimum-stay requirements from one night to two for many other fares. Northwest earlier this month had taken similar actions before retracting the changes
(BTN, June 20).
A Northwest spokesman at midday said the carrier's price hike and ticketing moves had remained intact but J.P. Morgan Securities analyst Jamie Baker in a research report today said the latest initiative garnered only limited competitive matches from American, Continental and Delta. "While Delta did raise 7,000 capped fares, none were pushed above $499," he said. "Substantive industry fare efforts are therefore likely stalled until such time that Delta revisits this level, an event we expect to occur later this summer."
"While unsuccessful in the past, it is incumbent upon Northwest to rigorously pursue changes that will improve its revenue and partially offset the staggering effect of increasing oil prices, currently at $60 per barrel," said Tim Griffin, Northwest executive vice president of marketing and distribution, yesterday in an employee message.
The price of a barrel of crude oil on the New York Mercantile Exchange was essentially flat in afternoon trading, but down more than $2 since the beginning of the week.