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Delta raises domestic air fares $5 each way

Delta Air Lines Inc. said on Friday that it raised domestic U.S. air fares $5 each way, testing pricing power a week after a similar effort failed.
/ Source: Reuters

Delta Air Lines Inc. said on Friday that it raised domestic U.S. air fares $5 each way, testing pricing power a week after a similar effort failed.

Delta said it was raising walk-up and advance-purchase tickets on flights across the U.S. to offset cost pressure, especially on jet fuel, said spokeswoman Betsy Talton.

A similar fare increase, led by Continental Airlines, a week ago collapsed as rivals failed to match.

Airlines, which are gearing up for the busy summer travel season, have sought to raise fares to offset higher costs of jet fuel, which vies with labor as an airline's largest expense. The price of jet fuel has risen about 17 percent over the last four months.

But softening demand amid a weakening U.S. economy has made it difficult for airlines to pass on these higher costs.

Five attempts to raise fares so far this year have largely been unsuccessful, falling apart under competitive pressure, especially from discount carriers like Southwest Airlines Co.

Fares typically rise in the run up to the summer travel season, but prices this year have been flat and are now about 10 percent below where they were a year ago, said Neil Bainton, chief operating officer at fare tracker FareCompare.com.