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Fare hikes help United Continental and US Airways
by JOSHUA FREED AP Airlines Writer
Jul 22, 2011 | 518 views | 0 0 comments | 5 5 recommendations | email to a friend | print
Fare increases gave United Continental and US Airways profitable quarters despite the financial damage the airlines suffered from sharply higher fuel prices.

On Thursday both airlines reported smaller second-quarter profits than a year ago — down almost 12 percent at United Continental, and a 67 percent drop at US Airways.

Airlines have put growth plans on the shelf and, especially at United, focused on getting more business travelers on board. That has allowed the airlines to raise fares. On Thursday, some airlines attempted a fare increase of up to $20 round-trip.

“The reason they’re able to raise fares is because of choices they’ve made by keeping capacity down, by looking to raise fares instead of gain market share, by trying to attract higher-yielding passengers in the cabin rather than just filling the cabin, by waiting longer to put fares on sale,” said Standard & Poors airline analyst James Corridore.

The boost in ticket prices is a reaction to high fuel prices. American Airlines parent AMR Corp. said Wednesday it paid $547 million more for fuel in the second quarter than a year ago. It lost $286 million.
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