Delta reportedly breaks ranks, halts 3% fare increase

Airlines

November 27, 1999|By BLOOMBERG NEWS

ATLANTA -- Delta Air Lines Inc., the No. 3 U.S. carrier, yesterday dropped its 3 percent fare increase, raising the possibility that three rivals may roll back the higher prices, an Internet site that tracks fares said.

Delta rescinded its increase on business and leisure fares, said Tom Parsons, editor of bestfares.com. The increase remains in place at UAL Corp.'s United Airlines, Continental Airlines Inc. and AMR Corp.'s American, which started the fare boost late Monday to make up for higher fuel costs.

Most major airlines have to join the fare increase for it to stick.

Northwest Airlines Corp., the No. 4 U.S. airline and a frequent holdout, hasn't gone along. Neither have US Airways Group Inc., TWA Corp. and American West Holding Corp.'s America West Airlines.

"Delta pulling out puts United, America and Continental at a disadvantage to be out there with the highest fares," Parsons said. "We might see them start to jump ship."

Delta, headquartered in Atlanta, wasn't immediately available to comment. It's illegal for airlines to discuss prices with rivals. A carrier raises fares and hopes the others will follow.

The airlines that raised fares are trying to offset fuel costs, which account for as much as 15 percent of their expenses. Crude-oil prices have more than doubled since Jan. 1.

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