Several Major Airlines Raise Fares Up to 4%

Several airlines raised leisure fares as much as 4% and business fares as much as 3.5% on Friday, hoping to take advantage of the strong travel demand in the United States.

The move marks the eighth attempt this year by the airlines to raise ticket prices for leisure passengers. Previous attempts were squelched when one of the airlines--most often Northwest Airlines Corp.--declined to join in the fare hikes.

Continental Airlines Inc. led the increase late Thursday, raising its fares 3.5% for both walk-up and advanced-purchase tickets. UAL Corp.’s United Airlines followed with a 3% rise in last-minute unrestricted fares, commonly purchased by business travelers, and Delta increased discount fares 4%.

Some other airlines are following. AMR Corp.’s American Airlines matched Delta’s 4% discount fare increase, and US Airways Group Inc. raised its discount fare 3%. Delta subsequently increased the price for an unrestricted walk-up ticket by 3%.

Northwest spokesman Jon Austin said the airline hadn’t raised its prices late Friday. At Trans World Airlines Inc., “it’s something we’re looking at, but we have not made a decision yet,” spokeswoman Julia Bishop said.

While demand for air travel in the U.S. is at a record high and reservations appear strong through the end of the year, airlines are beginning to worry that an economic slowdown may start to hurt travel demand. Many U.S. companies have already begun to tighten their travel budgets, according to the National Business Travel Assn.

“I don’t think it will be met too warmly,” Ed Starkman, an analyst at Warburg Dillon Read in Seattle, said of the price increase. “Here we are looking at a potential softening of the economy, and these guys are raising fares.”

Airlines typically try to increase fares late Thursday night and watch competitors’ reaction over the weekend before deciding whether to keep the higher price in place. Airlines can’t legally agree to raise their prices at the same time.