Tags: Southwest | airlines | airfare | Low | Fares

Southwest's Air Fares Soar 39% in Last 5 Years

Thursday, 02 Jun 2011 08:24 AM

Southwest Airlines, which wrote the business model for discount airlines, is having a tough time passing itself off as a low-fare carrier these days.

High fuel prices, an end to attractive fuel hedges and a changing route network have forced the airline to raise fares faster than many other carriers.

Southwest's average ticket price has jumped 39 percent in the past five years, while the average ticket price for domestic trips for the industry was up 10 percent during that period, The Wall Street Journal reports, citing Department of Transportation data.

While the company continues to turn profits, a rarity in the airline industry, high fuel prices mean customers must pay more.

"We don't like the fact that we have had to increase prices, but we absolutely would continue to hold out that we are America's leading low-fare airline," says Dave Ridley, Southwest's chief marketing officer.

To fly someone from New York to Los Angeles and back, airlines spend close to $330 just on fuel, up 48 percent from last year, the Associated Press reports.

Oil prices hovering over $100 a barrel are also the reason why customers see flights advertised for about $59 but end up paying $300 for a flight when all is said and done.

“The passenger has to understand that the airline industry in the United States is not meant to be a low-cost mass transit system. The airlines are in business to be profitable,” airline analyst Robert Herbst says.

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Southwest Airlines, which wrote the business model for discount airlines, is having a tough time passing itself off as a low-fare carrier these days. High fuel prices, an end to attractive fuel hedges and a changing route network have forced the airline to raise fares...
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2011-24-02
 

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