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Airlines Start to Raise Domestic Fares by Up to $5 Each Way

U.S. airlines, including American Airlines and United Airlines, said they raised domestic air fares by as much as $5, in the first effort at a broad price rise this year.

Higher air fares, along with cost-cutting and resurgent demand, helped the long-suffering industry post profits in 2006 after years of losses.

The fare rise would come as jet fuel, which vies with labor as an airline's biggest expense, trades at some of its lowest levels in more than a year.

American Airlines, owned by AMR, said it raised fares by $3 each way on trips 1,000 miles or shorter and $5 each way on trips over 1,000 miles.

United, a unit of UAL, said it raised prices by $5 each way across its entire domestic network.

Delta Air Lines said it matched United's $5 fare increase across most domestic markets.

Northwest Airlines, meanwhile, followed American's lead of increasing fares by $3 on trips under $1,000 miles and by $5 on flights over 1,000 miles, according to FareCompare, a research firm that tracks air fares.

Continental Airlines said it hadn't matched the increases.

The fare increase, if it holds, would follow a $5 systemwide increase by U.S. airlines on Dec. 20, said FareCompare's Neil Bainton. Price increases often get rescinded if other carriers don't follow suit.
On Friday, jet fuel traded at about $1.57 a gallon, well below summer highs of over $2.25.

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