Mar

17

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Although airfare analysts said the first half of 2007 brought little action in terms of fare increases, the latter half saw several widely adopted fare hikes in the domestic market—largely due to the surging cost of fuel to airlines.

By some estimates, airfares are expected to grow by up to 5 percent this year from 2007 levels, as legacy carriers continue to scale back domestic capacity and keep their airplanes exceedingly full.

However, anticipation of a potential economic slowdown has sparked demand concerns among domestic carriers.

Average Domestic One-Way Airfare, Mid-market

  • 2006 - $452
  • 2005 - $398
  • 2004 - $296
  • 2003 - $322

American Express
will receive $2.25 billion from Visa to settle a conspiracy lawsuit this month, and the card vendor said it intends to use the first $1.13 billion payment of that settlement this quarter to invest in business-building initiatives, including its rewards program.American Express

Specifically, American Express is considering enhancements to methods of estimating its liability for Membership Rewards including a new statistical approach to estimating redemption rates.

Other investments will include marketing, promotion and cardmember services, and American express will decide on whether to invest future settlement payments on a quarter-to-quarter basis, according to the company.

The lawsuit, pending since 2004, stems from American Express’ claims that Visa, Master Card and their member banks blocked American Express from having bank-issued cards in the United States.

All banks in the lawsuit also have been dropped as defendants as a result of the settlement, leaving MasterCard as the sole remaining defendant.

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