UPDATE 1-U.S. airlines raise fares twice in 2 weeks
* Carriers lift U.S. domestic fares for second time in 2009
* Index of airline stocks leaps 5 percent
* (Adds details on new rate hikes announced Thursday, share move)
NEW YORK, June 25 (Reuters) - U.S. airlines raised fares for a second time in two weeks, a strong signal that ticket prices may be nearing a bottom, according to FareCompare.com, a site that compares prices for flights.
Still, discounts remained widely available, according to the website on Thursday.
Delta Air Lines (DAL.N) raised rates by between $10 and $20 for round-trip flights, FareCompare data showed, and Continental Airlines CAL.N also raised rates, which it began to do Wednesday night.
The carriers joined AMR Corp's AMR.N American Airlines and UAL Corp's United Airlines UAUA.O, which both boosted fares for U.S. routes on Wednesday. US Airways (LCC.N) is expected to bring up fares by Thursday, FareCompare.com said.
The increases are an attempt by airlines to lift prices ahead of a key summer season, typically a strong period for the airline industry, FareCompare.com Chief Executive Rick Seaney said.
"Until about three or four weeks ago, you saw almost continuous airfare sales," said Seaney. "Now the sales we do see are Tuesday, Wednesday, Saturday sales, off-peak sales instead of discount."
The increases also suggest some business travel is coming back, a welcome change for the airline industry, Seaney added. Fares have suffered sharply this year due in part to fewer travelers paying for business-class seats, which cost between 2.5 to 3 times more than a coach-class ticket.
"If there is another (fare hike) in a couple of weeks, we'll know for sure," Seaney said.
The AMEX airlines index .XAL leapt nearly 5 percent in afternoon trading.
Sluggish consumer and corporate spending has forced airlines to lower fares to stimulate demand. The industry has also been hurt by oil prices, which have doubled since early February.
Major legacy carriers and low-cost carrier Southwest Airlines (LUV.N) boosted fares on U.S. flights two weeks ago for the first time this year.
On Thursday, data from the International Air Transport Association showed May passenger traffic slumped 9.3 percent. The improvement appeared to show the decline in traffic was leveling off, although not improving.
"We may have hit a bottom, but we are a long way from recovery," IATA CEO Giovanni Bisignani said in a statement.
On Thursday AirTran Holdings Inc AAI.N announced prices that FareCompare.com said represented "new market lows."
(Reporting by Deepa Seetharaman, editing by Dave Zimmerman and Richard Chang)
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