US airline fare hikes this time taking hold?
David Wilkening, Travel Mole, 10/18/2007 (excerpted)
The recent airline fare hikes this time may hold up, industry observers say, in part because of continuing record passenger traffic.
"I believe the American Airlines initiated $10 round-trip increase will, for the most part, end up successful," said Rick Seaney, chief executive at fare tracker FareCompare.com, told Reuters.
UAL Corp.'s United this week joined the five largest US carriers in raising round-trip fares $10. The airlines say the move was made because of higher fuel costs.Delta Air Lines Inc., Continental Airlines Inc., Northwest Airlines Corp. and US Airways Group Inc. adopted the increase last weekend after it was initiated by AMR Corp.'s American Airlines, the world's largest carrier.
The increase marks at least the seventh time this year that legacy airlines such as American have boosted ticket prices.
Southwest Airlines Co., the largest low-fare carrier, has led another five increases, according to wire reports.
"The trend toward higher fares continued in 2007 but with less gusto as various price increases initiated by individual carriers failed to win matches," says Reuters.
There's no question jet fuel prices have pressured airlines to raise rates. Jet fuel has climbed 36% from the end of 2006.
A 1 cent-per-gallon increase in the price of jet fuel adds $30 million to annual expenses at American, say analysts.
The latest ticket-price increase applies to the continental US, and includes leisure and business fares. It excludes markets where the airlines compete directly with discount carriers such as Southwest.