US: Southwest lowers fares while Delta raises some

Southwest Airlines caught rivals and Wall Street by surprise when it cut many US fares by $5 each way. The reduction this week applied to tickets bought within seven days of departure, which are usually favoured more by last-minute business travellers than vacationers. Meanwhile, Delta was busy raising fares on domestic routes by $5 each way. And it did not match Southwest’s lower fares where the two carriers compete, a Delta spokesman said Thursday. Spokesmen for American and United said that their airlines matched the Southwest reduction on routes where they overlap with Southwest but did not match Delta’s fare hike. Southwest’s decision to cut base fares was particularly eye-catching. JPMorgan analyst Jamie Baker, who tracks fares, said he could not recall such a “plain vanilla fare decrease by a large airline.” Baker said he was “troubled” because the decrease unwound a fare hike from February. Airline stocks have fallen in recent days over renewed concern that average fares, which began dipping early last year, will continue to drop throughout 2016. <br/>