Airlines hit by slowing travel increase fees

In this tough economy, does it make more sense for airlines to lower fares to draw in budget-conscious travelers or raise rates and fees to boost revenues?

There seems to be no consensus, judging by the news of the past week or so. Southwest Airlines and AirTran Airways raised domestic fares in the past week by $10 to $20 for round trips.

At the same time, Delta Air Lines, Continental Airlines, United Airlines and US Airways increased baggage fees by $5, to $20 for the first bag and $30 for the second, according to discount travel site Bestfares.com. American Airlines joined the pack Friday, announcing that checking the first bag will cost $20, up from $15, and a second bag will cost $30, up from $25.

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