U.S. Airlines Lift Fares on Mexico’s Complaint

U.S. airlines raised fares on flights to and from Mexico after the Mexican government complained that price cuts were hurting local carriers.

U.S. airlines such as AMR Corp.’s American Airlines, Continental Airlines Inc. and Delta Air Lines Inc. have eliminated some discounts offered after the September terrorist attacks caused a drop in passengers. Some fares had been cut in half.

Mexico, which reserves the right to approve fares on flights serving the country, complained that lower fares announced by U.S. carriers would drive local carriers out of the market.

It expressed concern the airlines were using $15 billion in cash aid and loans from the U.S. government to subsidize international operations.

The Latin American International Air Transport Assn. said in letters sent to Secretary of State Colin L. Powell and Transportation Secretary Norman Y. Mineta that the subsidies violate competition agreements.

The Assn. of European Airlines also expressed concern the aid package would “distort” competition.

American boosted the price of a round-trip ticket from Mexico City to New York to $400 from $250. Delta raised the round-trip fare from Mexico City to Los Angeles to about $270 from $220 and to Dallas to $350 from $310. Continental raised the round-trip fare from Mexico City to Miami to about $400 from $340. United has not raised its fares this month.