Tags: airlines | fuel | fare | Seaney

Airlines Saving on Fuel But Hike Fares Anyway

By    |   Tuesday, 21 October 2014 10:58 AM

If you think cheaper fuel and Ebola fears will mean bargains on airfare think again. U.S. airlines just hiked fares, USA Today reports.

United, Delta, American, US Airways and JetBlue have joined an industry-wide fare increase of $2 one way or $4 round trip on many domestic flights.

Airlines will often drop price hikes if they are resisted by Southwest, which carries the most domestic passengers, The Associated Press reports. But Southwest has joined the trend, giving the higher fares an important nod of approval.

The higher fares come as surprise to many investors who have been concerned that cheaper oil prices would result in lower fares.

Fuel is the biggest expense for most airlines and generally fare hikes are rationalized as a way to cover higher costs. But jet fuel has fallen by about one-fifth since April and airlines are getting a windfall, the AP notes.

Those savings are not being passed along to passengers, Rick Seaney of FareCompare.com tells USA Today.

Airline stocks have also come under pressure recently as investors worried that Ebola fears would limit the desire to fly.

"Ebola fears do not appear to be hurting demand for flights and the news about the end of the quarantine period for dozens of Texans with no new infections may continue to calm lingering fears," Seaney notes.

Airlines have tried to hike fares 20 times this year including three attempts in October, he adds, but most of those efforts failed.

While this latest rise marks the fifth successful price hike this year, it doesn't necessarily mean that passengers are sure to pay more to fly. Airlines run sales frequently and adjust fares on certain flights depending on demand, according to the AP.

Carriers want full planes and "filling empty middle seats requires discounting, especially on low demand days," Seaney tells USA Today.

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If you think cheaper fuel and Ebola fears will mean bargains on airfare think again. U.S. airlines just hiked fares, USA Today reports.
airlines, fuel, fare, Seaney
305
2014-58-21
Tuesday, 21 October 2014 10:58 AM
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