Airlines are definitely trying to push up the lowest leisure fares. It's in part because business travel is way down, due both to resistance to the fares (which went up too far, too fast) and driving rather than flying short hauls because of the time/hassle factor post-9/11.

They're also limiting supply, cartel-like, to apply upward pressure. CO's Gordon Bethune is among the more ardent advocates of this approach, criticizing other airlines that tried to restore capacity after 9/11.

I think the leisure travelers still will win out in the end because of the discretionary nature of the costs and the deep-discount airlines, who also stand to benefit from this.