Airlines Follow Northwest in Reversing 4% Fare Increase

Major U.S. airlines rescinded a 4% increase in leisure fares Thursday, a day after Northwest Airlines Corp. reversed a price boost that had spurred an airline industry markup.

On Tuesday, Northwest initiated the increase on fares for tickets purchased seven, 14 and 21 days in advance of travel, which it then rescinded on Wednesday. It was joined Thursday in its rollback by UAL Corp.’s United Airlines, AMR Corp.’s American Airlines, US Airways Group Inc., Continental Airlines Inc., Trans World Airlines Inc. and America West Holdings Corp.

The temporary increase was the seventh attempt this year to raise fares for leisure passengers, who are more likely than business travelers to buy tickets weeks in advance. Northwest, which faces a threatened pilots strike Aug. 29, surprised analysts by raising fares after previously declining to go along with increases by other carriers.

Northwest “buckled under the pressure of the pending strike and the tremendous negative publicity they have received over the last six months,” said Terry Trippler, who publishes an online traveler and airline rights Web site called Rulesoftheair.com.

Northwest, the fourth-largest U.S. carrier, has grappled with flight cancellations and disruptions it blamed on contentious labor negotiations. The airline wouldn’t comment on the fare changes. Its shares rose $1.06 to close at $30.06 on Nasdaq on Thursday.

The carrier may have been upset that some rival airlines stuck with lower fares on its routes after its fare boost Tuesday, Merrill Lynch & Co. analysts said. The carrier also might have expected other airlines to maintain higher fares after its reversal, which would have made its own flights cheaper and more attractive to travelers nervous about the strike, they said.

Jan Durbahn, a Rochester, Minn., travel agent who is also an American Society of Travel Agents chapter president, initially interpreted the fare increase as a sign the labor talks were proceeding well and doesn’t know what to think now.

Airlines can’t legally agree to raise their prices simultaneously, though they typically follow suit when rivals hike or cut fares.