American Airlines' Fare Hike Is Contagious

A fare increase was launched by American Airlines this past week, and as of Friday is expected to stick. Northwest Airlines Corporation, Delta Airlines Incorporated, and Continental Airlines Incorporated announced they, too, would raise fares. American Airlines blamed the fuel prices when it announced fare increases of $5 one-way and $10 round-trip on most domestic and U.S.-Canada flights on Thursday. How will this fare hike affect airline demand? Probably very slightly if at all, considering all three of the major airlines competing with American Airlines are anticipated to follow suit.