Airlines Begin Rolling Back Fare Hikes

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DALLAS (AP) - U.S. airlines have started rolling back last month’s fare increases, so passengers are likely to pay the same prices even though federal ticket taxes are being collected again.

Southwest Airlines Co., its AirTran Airways subsidiary and Delta Air Lines Inc. said they cut fares back to where they were before July 23, when the taxes expired.

Industry observers said they expected other airlines to do the same, but by midday Monday United, Continental and US Airways said they were still charging the higher prices. American Airlines and JetBlue Airways officials said they had lowered fares on some routes — likely those where they compete with Southwest.

On the airlines that rolled back fares, consumers were paying the same total price as before this weekend instead of seeing increases of 7.5 percent or more for travel within the U.S.

Most U.S. airlines raised fares last month after a standoff between Republicans and Democrats in Congress on funding for the Federal Aviation Administration caused federal excise taxes on tickets to expire. In effect, the airlines grabbed the money that previously went to the government instead of passing the tax break to consumers.

By raising fares to offset the expired taxes, airlines were able to pocket an estimated $400 million in just two weeks.

Last week Congress revived the taxes through Sept. 16.

Rick Seaney, CEO of FareCompare.com, said Southwest and AirTran started rolling back the July fare increases on Sunday night and he expected other airlines to quickly do the same. Delta said it matched Southwest on Monday morning.

Tom Parsons, CEO of Bestfares.com, said the weak economy and stock market turmoil could force airlines to do more than just cancel last month’s fare hike.

“They have to be concerned over (travel demand in) the fall,” he said. “They may still have to bring fares down further.”

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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