Airlines Still Adding New Fares as Costs Stay High

Over the weekend US Airways raised same-day fares anywhere from $6 to $10 round trip causing other airlines to follow suit according to USA Today.

The increase was the tenth rate hike this season as airlines have tried to stay profitable in the face of high fuel prices and an abnormal increase in weather-related cancellations this year.

Airlines have tried to increase fares every few weeks since the start of the year but they don’t always stick. The key this time was getting low-cost carriers on board.

But it was Southwest’s decision to match the increase that helped ensure it would stick — unlike eight other times airlines sought to raise fares this year, says Jamie Baker, managing director and U.S. airline equity analyst for JPMorgan Chase.

“Had Southwest not joined,” he says, “we are highly confident that the increase would have unraveled over the weekend.”

As the summer months, and the subsequent seasonal increase in fuel prices, winds down, it will be interesting to see whether airlines drop fares if fuel prices drop or if they will maintain higher-than-usual fares to make up for lost profits earlier in the year. For consumers there will likely be little breathing room as we are already just two months away from Thanksgiving and some of the busiest, and most expensive, months of the year.

This entry was posted in AIRLINES, RUMBLINGS and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s