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Airline stocks rise on fare hikes to offset fuel

February 16. 2013 5:59PM
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(AP) U.S. airline stocks are gaining steam Monday following a successful attempt to raise fares to cover the rising cost of fuel.

Southwest Airlines Co. raised fares on short routes by $10 per round trip, and several large airlines quickly matched the increase. Southwest carries a lot of influence in fare sales because it carries more passengers within the U.S. than anyone. Many attempts to raise prices don't stick because Southwest doesn't play along.

JP Morgan analyst Jaime Baker expects the airlines to keep trying because fuel costs are going up. Also, reductions in flying are giving the airlines more of an upper hand to raise fares because there are fewer available seats to match demand.

In afternoon trading, Southwest shares are up 3.3 percent, or 30 cents, to $9.43.

Associated Press

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