Airlines' attempt to raise domestic fares stalls-for now

Article Abstract:

An attempt by several major airlines in the United States to raise domestic prices has apparently failed after Continental Airlines decided to withdraw its increase on May 15, 2000. Continental Airlines withdrew its proposed increase after Delta Air Lines and three other airlines only increased their walk-up fares. Proposed increases usually remain if other airlines match the increase. However, if the price increases should succeed, domestic prices would reach up to $30 a round trip.

Commodity & service prices

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Unions can throw wrench in plans

Article Abstract:

Labor unions of United Air Lines and US Airways do not have veto powers to reject United's $4.3 billion acquisition of US Airways. The deal has been approved by the board of directors of UAL, United's parent company, but does not need the approval of UAL shareholders, which include 90,000 United employees. Labor unions can influence the deal in three ways: exercising contract protections, dragging out contract talks and by lobbying. For instance, a clause in the US Airways' pilot contract, requires the company to pay the pilots' union $250 million if job security for pilots cannot be guaranteed.

Asset sales & divestitures, Acquisitions & mergers, US Airways Inc.

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