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Southwest set to raise prices, too

Yesterday I noted the lowest fares on JetBlue might soon be a lot harder to come by. The news gets even worse today. The nation's other low-fare darling, Southwest, says it's facing about $600 million in higher fuel costs this year. And, says Laura Wright, Southwest's chief financial officer, "We're going to have to see revenue improvement to cover those fuel costs."

The airline isn't coming right out and saying it will raise prices, but airline specialist Terry Trippler of Cheapseats.com says he expects Southwest to go even further than the $2 to $3 increase it established earlier this year. Trippler predicts an industrywide increase in leisure travel prices of about 10 percent this year.

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For its part, Southwest says it plans to continue its expansion (about 30 new planes this year). Financially it's also in better shape than JetBlue: Southwest actually made money in 2005, to the tune of $548 million net income. That's up 75 percent year-over-year.

As with JetBlue, I expect we'll still see those dazzlingly low prices on most routes. There just won't be as many seats available at those rates. And that's all the more reason to shop around before you book.

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