Carriers Matching Northwest Fare Hike

A modest airfare hike initiated yesterday by Northwest Airlines appears to be sticking as both American and Delta have enacted competitive matches, according to officials at those carriers. The price increase is either $5 or $10 each way, depending on distance, and also has been selectively matched by certain low-cost carriers, according to J.P. Morgan Securities analyst Jamie Baker.

"Contrary to expectations, Delta has raised most Simplifares by $5 or $10 one-way, while leaving its published $499 walk-up fares untouched," Baker said today in a research note. "Combined with selective matching by other carriers, we now expect a successful increase of most domestic leisure fares over this weekend."

A Delta spokesperson confirmed the carrier "has matched to become competitive" by implementing $5 and $10 price increases on routes versus Northwest. An American spokesperson confirmed similar information, calling the carrier's reaction Thursday night a "broad" match.
Officials at both Continental and US Airways said those carriers as of midday had not matched Northwest's move. United at press time was not available for comment.

"America West, ATA, Midwest and Independence Air have selectively matched Northwest's initial increase," added J.P. Morgan's Baker. "Our best guess is that AirTran will increase fares, JetBlue won't. Southwest 50/50."

Northwest generally is not known to initiate fare hikes, and in fact has often resisted raising fares in the past few years. Unlike American and Delta, the fourth-largest U.S. carrier also has not reformed pricing across its domestic network nor imposed a cap on one-way fares.