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Travelers' Aid

This Week: Airline Fare Wars
March 25, 2000

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Well, anyone who's been following air fares lately knows it's been tough to get any deal. First the airlines added a fuel surcharge in January that raised fares as much as $40 on a round trip. Then, for the last month or two, different airlines have been trying to create an industry-wide fare hike. Now, this deserves some explaining.

See, the airlines are forbidden by law from talking to each other about money. So whenever one wants to raise its prices, it tries out the new fares on, say, a Friday afternoon. Then, it sits back and waits. If all the other airlines raise their prices over the weekend, the new fares stick. But if even one airline holds out, the increase falls apart.

What that means is for the last several weeks, prices have been going up on Fridays, and then falling back down on Mondays. That is until last week. That's when the only hold out, Northwest, finally raised its fares too.

Confused by all this up and down? I am. So, I called Terry Trippler, the resident expert at onetravel.com to find out what effect all these fare increases and decreases are having.

This whole conversation about fare increases begs another question. To learn how are fares determined in the first place, I went to Joe Brancatelli, a frequent flyer expert and columnist for biztravel.com. I asked Joe if all these pricing hijinks can be anyway to run a business.


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