US airline makes second bid at fare boost in week

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By David Bailey
CHICAGO, April 18 (Reuters) - American Airlines said on Thursday it raised
leisure air fares $20 round-trip systemwide, the second time in a week a
major U.S. carrier sought an increase as the industry seeks to reverse huge
losses following the Sept. 11 attacks.

The increase by AMR Corp.'s (AMR) American Airlines hit public circulation
Thursday afternoon, Bestfares.com Chief Executive Tom Parsons said. Other
carriers may have matched the fares, but changes would not be available
until late Thursday night or early Friday, he added.

A spokesman for AMR, the world's largest air carrier, said the increase
primarily affected leisure fares and was up to $20 per round-trip ticket.
AMR reported a $575 million first-quarter net loss on Wednesday.


Continental Airlines (CAL), the No. 5 U.S. carrier, led a similar bid to
raise leisure fares last week. Most majors matched the increase, but the bid
failed on Monday, after No. 4 U.S. carrier Northwest Airlines (NWAC) refused
to go along.

"You may still see some of the bigger airlines match quickly, but others may
hold off until they see what Northwest is going to do," Parsons said.

Northwest could not be reached immediately for comment. Delta Air Lines
(DAL), the No. 3 U.S. carrier, also raised fares on many routes, one analyst
said. Delta could not be reached immediately for comment.

"Over the next couple of days we expect to get better clarity as to who will
match and how extensive this fare action will be," Deutsche Bank Securities
analyst Susan Donofrio wrote in a research note.

Northwest may force the increase to be scaled back, but the attempts to
increase fares suggest the industry has some confidence in forward bookings,
Donofrio wrote.

UAL Corp.'s (UAL) United Airlines raised fares $20 on scattered routes and
fare types late on Wednesday. Northwest officials said Thursday they matched
the increases on specific routes they believe could take an increase.

No. 2 U.S. carrier UAL is scheduled to release first-quarter results on
Friday.


©2002 Reuters Limited.

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