The Civil Aeronautics Board yesterday said it will allow the airlines to increase domestic fares by 0.8 per cent, effective between Aug. 7 and 18. The board also approved the requests of five of the airlines for an additional 0.5 per cent increase, effective between Aug. 8 and 22.
It is expected that the airlines that did not ask for the additional 0.5 per cent boost before will do so now that the board has granted it for some.
On top of the 0.7 per cent increase in air fares granted in mid-July, yesterday's action means air fares will rise between 1.5 per cent and 2 per cent above the fares of a month ago.
Without the fare increase, the board said the industry's rate of return on investment would be 10.2 per cent: with the 0.8 per cent increase, it will be 11.6 per cent. The board considers 12 per cent an adequate and fair return.
Although the additional 0.5 per cent increase would raise the return to 12.07 per cent, the board said the deviation of 0.07 per cent is "too trivial" to warrant suspending the increase.