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American Raises Fares, Others Follow

While some are touting 2010 as the "Year of the Travel Deal," the truth may be a bit more complicated than that. While suffering hoteliers will decrease hotel rates and create more package deals, airlines are still finding new ways to create revenue.

American Airlines raised fares $6 to $16 Monday and five other carriers followed suit. The five so far: Continental, Delta, United, US Airways and bargain Southwest airlines. Southwest, which had resisted the $10 holiday surcharge placed on many flights, seems to have had a change of heart. Or maybe it realized that it was ignoring an untapped revenue stream? (Southwest said that its fee would actually be $4 to $10 round-trip.) The real reason is that Southwest posted a loss on the third quarter, unlike competitor JetBlue.

Either way, most airlines were operating in the red last quarter and they don't intend on staying that way. In fact, the third quarter of 2009 should be most known for the creative ways (read fees) airlines came up with cash.

Three airlines came out with a profit in the third quarter, JetBlue, Alaska and AirTran. So far none have joined the six carriers in raising fares. (However, AirTran joined in on the $10 holiday surcharge from Thanksgiving to Memorial Day.)

Photo courtesy of Alaska Airlines

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