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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.

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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 Price increases often get rescinded if other carriers don't follow suit.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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