Tags: Airlines Fares

Latest Airfare Hike Cut in Half After Discount Carriers Resist

Tuesday, 01 Mar 2011 02:12 PM

The most recent attempt by U.S. airlines to boost fares has been cut in half by pressure from discount carriers.

Last week, the big network carriers including United, Continental, Delta and American raised many domestic fares by $20 a round trip. By Monday afternoon, the increase had been cut to $10.

Rick Seaney, CEO of website FareCompare.com, said the rollback occurred after low-fare airlines Southwest, JetBlue, AirTran and Frontier began raising fares only half as much as the larger carriers. He said the network airlines then cut their increases in half to avoid charging more than their low-fare competitors.

Seaney said U.S. airlines will continue to test price increases in coming weeks to see how much travelers will tolerate. Some analysts believe airlines will drive customers away if they raise prices on leisure fares any higher.

The airlines have already attempted five broad-based price increases this year, with most of them sticking. They have also twice imposed bigger increases — up to $60 a round trip — on high-priced tickets favored by business travelers. A third attempt to raise business fares failed.

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The most recent attempt by U.S. airlines to boost fares has been cut in half by pressure from discount carriers.Last week, the big network carriers including United, Continental, Delta and American raised many domestic fares by $20 a round trip. By Monday afternoon, the...
Airlines Fares
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2011-12-01
 

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