Last week United tried to raise its fares but backed down after other airlines failed to follow suit. But consumers who breathed a sigh of relief should summon some more air. Late this week Delta, Continental and American raised fares by as much as 10 dollars for both business and leisure travel. No doubt United will soon do the same. Competition from discount carriers doesn't factor in here, because the fare increases apply to routes not flown by Southwest or JetBlue.
Where competition exists, prices remain quite low. Texan travelers must be happy, because Southwest's penetration of Dallas, which has the carrier locked in a fare war with American, has generated super-cheap fares. One way fares from Dallas to NY can be purchased for as little as 50 dollars. It's not clear how long American can remain in this struggle before it waves a white flag for its orange, red and yellow foe.
You might be wondering why fares continue to increase as fuel prices go down. The legacies insist that fares never caught up to rising fuel prices, and that they're still searching for the right price. As the holiday season approaches, I imagine their "search" will take them sky-high.