Thud! Rising Fares Hit a Sudden Air Pocket

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A week after having hiked fares 4 percent, the airline industry clipped its own wings on Tuesday. United Airlines announced that it is slashing ticket prices by as much as 25 percent for off-peak summer flights, prompting the other major carriers to fall quickly into formation with similar reductions and promotions. Analysts say that the carriers, buoyed by increased business and leisure travel, may have bought too many planes and put them into service too fast.

"Any company that feels pressure to break ranks will destroy whatever discipline the airlines might have," says TIME senior economic writer John Greenwald. The competitive price climate is good news for consumers' pocketbooks, but it could further erode matters on the service front. The cheaper fares are meant to attract more passengers -- and that, says Greenwald, means "that somewhat more affordable ride will probably translate into more cramming into increasingly uncomfortable planes."