Here's a perfect example from yesterday and today.
United raises First class/Business class, and full price coach fares by up to $50. (Fares paid by last minute travelers, almost always business travelers who get reembersed from their companies). Delta, Northwest, and Continental all quickly followed suit, but American decided they did not want to possibly lose some business travelers to low cost carriers.
(business travelers are key to legacy carriers, because most of them will pay a few extra bucks for things like meals, pillows and blankets, and extra leg room which you can't get on low cost carriers.)
EVERY airline then was forced to rescind their fare increases. But then again today, Delta tried to increase the same fares by up to $50, and Northwest followed suit. But I bet it won't last unless United and American match them.
It is a tough business because you have so little control over the price of your product. People complain about airline execs, but they do a job that I could never do!