June 13, 2005
After an early June attempt to establish fare hikes sputtered, some U.S. airlines have matched the latest, fairly significant fare increases announced by Northwest Airlines, suggesting the fare hikes will stick this time.
Northwest says it is increasing the fare on nearly every one-way business class ticket by $50. It also replaced one-night minimum stays on many fares with the requirement of an additional night.
Northwest's fare increase is, in part, a take-back from the discounts most airlines adopted after Delta changed its travel rules in January. At the time, Delta implemented a fare cap on business travel of $499 each way. In another take-back, Northwest has upped some ticket prices by $5 to $10. The affected fares are the ones reduced earlier this year when the airline said it would match all fares offered by low-cost carriers.
In explaining the move, Northwest executives say the airline needs to raise revenue, and that increasing ticket prices on the most popular fares is the best way to do that. They say adopting Delta's $499 price cap has not resulted in the sale of more tickets.
Northwest's rule change could also end up costing business travelers more. Now they have to spend at least two nights, or else pay a much higher fare.
