US airlines raise base fares on domestic flights

Staff Writer
Columbus CEO

DALLAS (AP) — U.S. airlines are raising base fares on many domestic flights even though they are getting a windfall from lower fuel prices.

Delta Air Lines raised fares on many U.S. routes by $4 per round on Thursday night, and other big airlines have matched them, according to CEO Rick Seaney and J.P. Morgan analyst Jamie Baker. Seaney said Monday that he saw a few $6 and $10 increases, but mostly $4.

Delta did not immediately respond for comment. United Airlines confirmed matching the $4 increase. Seaney said American and Southwest also raised prices. The carriers did not immediately comment.

Higher base fares don't always result in passengers paying more. Airlines run frequent sales, and they adjust fares on individual flights depending on demand. The last successful broad increase occurred in April.

The increase showed that fear of Ebola hasn't hurt travel demand, and that airlines have not passed savings from lower fuel prices to consumers, Seaney said.

Oil prices, which show up in the cost of jet fuel, have fallen by about one-fifth since late April. Fuel is the largest expense for most airlines.

The price bumps could ease investors' concerns that lower fuel prices would be passed along in lower fares, Baker said.

Airline stocks rallied for a third straight day. As of late afternoon trading:

— Shares of Delta Air Lines Inc. were up $1.65, or 4.8 percent, to $36.04

— United Continental Holdings Inc. gained $2.75, or 6.2 percent, to $47.43

— American Airlines Group Inc. rose $1.65, or 5 percent, to $35.03

— Southwest Airlines Co. gained $1.70, or 5.5 percent, to $32.75