Northwest Hikes Fares; Two Other Airlines Do Likewise

Northwest Airlines Corp., the No. 4 U.S. airline, raised its domestic leisure fares in a move expected to yield the third industrywide increase this year, an online fare-tracking company said Monday.

Northwest increased the fares by 4% to match those set by Continental Airlines Inc. on Friday, according to Tom Parsons, editor of Bestfares.com in Arlington, Texas.

The Northwest price increase came after four of the top six carriers had first raised, then rolled back, similar increases in a span of three days.

The move by Northwest, a contrarian when it comes to air fare pricing activity, will probably lead to widespread fare increases as other airlines follow suit, Parsons said.

On Monday, AMR Corp.’s American Airlines and US Airways Group Inc. both increased fares to match Northwest.

“When Northwest gives their blessing, every Tom, Dick and Harry will scramble to push those fares back up again,” Parsons said. Northwest “is great at head games.”

It is possible that Northwest, based in St. Paul, Minn., could wait until the remaining carriers--No. 1 UAL Corp.’s United Airlines, Delta Air Lines Inc., Trans World Airlines Inc. and America West Holdings Corp.--match its fares, then roll back the prices, Parsons said.

Northwest was the major carrier to keep prices in check after Continental’s increase last week.

More than a dozen attempts to raise airline fares last year failed because Northwest failed to go along, forcing the other carriers to rescind the hikes, Parsons said.

Business-class tickets won’t be affected by the price increases, and a 3% rise in leisure and business-class fares in Canada is still in place, he said.

If all U.S. airlines stick to the fare increases, it will mean domestic leisure fares will have risen 11% so far this year.