Northwest hikes fares
Northwest Airlines confirmed Thursday it is hiking fares $5 each way for flights of less than 1,000 miles and $10 each way for longer runs.
The increases, which a company spokesman said were spurred by the continued high cost of jet fuel, could trigger similar increases by others.
Fare hikes like this are often posted late in the week like this, and then quietly rescinded the following week if competitors didn't match it and bookings fell.
What is different about this one is which airline is starting it. Northwest has been the most common holdout when other big five carriers attempt to raise fares.
With the most extensive Japan service of any U.S. airline and a lot of routes across the northern United States that have comparatively little direct competition from discount carriers, Northwest has more routes than other legacy carriers on which it faces little competitive pressure. With strong revenues from those routes, it can better afford to compete with discount airlines on other routes.
But in the past year the situation has changed. Soaring jet fuel -- the price of U.S. crude oil closed at $51.39 a barrel Thursday in New York -- has hurt discount carriers almost as much as legacy airlines, and most of them are now also operating in the red, while fares have remained among the lowest in decades in real dollar terms.
Northwest also announced Thursday the launch of an extensive cargo code sharing alliance with Korean Airlines, the busiest air freight carrier in the Pacific.
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