- The Washington Times - Tuesday, April 16, 2002

NEW YORK (AP) Several of the nation's major airlines, after increasing leisure fares by $20 round-trip late last week, reversed course yesterday, and their rivals were expected to follow.

Continental Airlines, which initiated the fare increases Thursday night, abandoned it yesterday, as did America West, American, Delta, United and US Airways, said Tom Parsons, chief executive of Bestfares.com.

Continental was probably influenced by Northwest Airlines, which by Sunday hadn't matched the fare increase across-the-board as the other carriers had, Mr. Parsons said.

"The first fare hike of 2002 is now a failure," he said.

Shares of major airline stocks fell yesterday, giving back gains made Friday, when the cost of fuel declined in response to the ouster of Venezuelan President Hugo Chavez. Mr. Chavez was restored to the presidency of the oil-exporting nation Sunday.

Continental's shares fell 4 percent, to $28.82, yesterday on the New York Stock Exchange, where shares of American's parent, AMR Corp., dropped 4 percent, to $24.03. The stock prices of United, Delta and Northwest also fell.

The fare increase also gave a temporary boost to airline stocks, as Wall Street interpreted the move as a signal that business was improving. But by reversing course, the industry showed just how fragile its comeback remains.

Air travel has gradually increased since the sharp drop-off related to September 11, although carriers have kept prices well below year-ago levels to spur business.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide