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Fri, Mar 25, 2005

Will Fare Hikes Stick?

UAL CEO Tilton Says Yes (Then No, Then Yes)

Since the cost of fuel began soaring higher and faster than SpaceShipOne, more than a year ago, America's legacy carriers have tried more than a half-dozen times to boost fares -- with no luck. Each time, they've been beaten back by low cost carriers. As ANN reported elsewhere today, some of those carriers, like Southwest Airlines, have hedged their costs through at least the end of the year. But try, try again, right? This time, at least one legacy carrier CEO says the latest fare hike will stick.

"It appears that after some tentativeness in the marketplace, the latest fare increase may well stick. The pricing can, and certainly must, improve," said United CEO Glen Tilton in a phone message to his employees. He was quoted by Reuters.

It's a timid little fare hike -- $5.00 per leg on a round trip. Even so, some carriers -- United and Continental among them -- first instituted the hike, then pulled back. They've since waffled again and reinstated the hike. But they're still concerned about how even a $5.00 hike might affect passenger traffic.

FMI: www.united.com

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