Southwest adds $10 to price of short round trip

[August 18, 2012]  DALLAS (AP) -- Southwest Airlines Co. raised fares Friday on short routes by $10 per round trip, and several large airlines quickly matched the increase.

The fare hike applied to flights of less than 500 miles each way, or about one-third of Southwest's routes.

"We never like to increase fares, but simply we needed to cover the cost of business," said Southwest spokeswoman Ashley Dillon.

During the second quarter, which ended June 30, Southwest's operating expenses rose 6 percent compared with the same period last year. Fuel, labor and maintenance costs all increased.

The company covered the higher expenses by boosting revenue nearly 12 percent, partly due to a 5 percent increase in the average fare, to $150 each way. Net income rose 42 percent, to $228 million.

Most U.S. airlines have continued making profits in 2012 despite the sluggish economy and historically high prices for jet fuel. They've been able to boost fares by holding down the number of flights and the supply of seats.

United Airlines, Delta Air Lines and American Airlines, the three biggest U.S. carriers, confirmed that they matched the Southwest increase. JetBlue Airways said Friday afternoon that it had not raised prices. US Airways did not immediately return messages for comment.

Sometimes airlines roll back price increases when competitors don't match them. That happened this week to Delta, which tried to raise prices on 3-day and 7-day advance-purchase tickets favored by business travelers.

The Southwest increase might prove more durable. Other airlines fly more miles, but Southwest carries more passengers within the U.S. than anyone, and it has great influence over prices.

Rick Seaney, CEO of FareCompare.com, said price increases supported by Southwest rarely collapse. "The opposite is normally the case," he said, "as many hikes fail due to (Southwest's) lack of participation."

U.S. airlines have attempted eight broad fare increases this year, and four have succeeded.

[Associated Press; By DAVID KOENIG]

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