United Usually Instigator of Recent Fare Hikes
By Tom Fontaine, Beaver County Times, Pa.
Jul. 6–CHRONOLOGY OF A FARE HIKE
Here’s a timeline of the most recent fare hike implemented en masse by the nation’s major carriers, according to airfare expert Rick Seaney, who runs the Web site FareCompare.com:
–The morning of June 26: Southwest Airlines announces a fare increase of $10 to $20 roundtrip for depatures starting Nov. 2. First hike initiated by the low-cost carrier this year.
–The evening of June 26: Delta ($20 to $30 roundtrip) and United ($20 to $40 roundtrip) simultaneously hike fares.
–June 27: US Airways, American, Continental and Northwest match with similar increases. Fastest-ever match by all six traditional carriers.
–The weekend of June 28-29: Most legacy carriers drop to the low end of the increase ($20 roundtrip) on competitive routes while raising fares $40 roundtrip on noncompetitive ones.
–Noon July 1: All six legacy carriers and Southwest “solidify the increase” at $40 roundtrip, making it a success. Air Canada, Alaska Airlines and Midwest Airlines also match. JetBlue and AirTran do not.
WHO’S WHO OF FARE HIKES
The instigators: United and Delta. United has initiated 11 of 21 attempted fare hikes this year; Delta has initiated five.
The sheep: US Airways, American, Continental and Northwest. They typically follow suit when other carriers raise fares, but they don’t initiate hikes. Northwest tends to be the last to match, making them “a pain in the side of the other airlines,” said Rick Seaney of FareCompare.com. US Airways, Pittsburgh’s busiest carrier, “tends to be sort of last on airfare hikes, but they are leading the way with new fees and watering down their frequent-flier program,” Seaney said.
The lone wolf: Southwest, the low-cost giant, raises fares about a third of the time that legacy carriers do. Its low-cost operations and fuel hedging helps. While fuel prices are more than $140 a barrel, Southwest has locked in 70 percent of its fuel needs for the year at the equivalent of $51 a barrel through hedging, an airline spokeswoman said.
United Airlines and Delta Air Lines are instigators, according to Dallas-based airfare expert Rick Seaney.
When the nation’s major carriers raise fares en masse, as they had done successfully 14 times this year through Wednesday, chances are either United or Delta was the carrier that initiated the hike.
“Most other carriers are more than happy to match their increases,” said Seaney, who runs the Web site FareCompare.com, alluding to the runaway fuel costs that have prompted airlines to hunt for any and all new sources of revenue.
Major carriers have attempted to raise fares 21 times this year to recoup some of their fuel costs, with the most recent try coming Wednesday night when United hiked fares $20 to $40 roundtrip across most of its system.
Of the attempts, Seaney said, 14 stuck — meaning all six of the nation’s legacy, or traditional, carriers raised fares at about the same time and by roughly the same amount on at least two-thirds of their routes. The hikes have ranged from $4 to $70 roundtrip.
Six of the would-be fare increases later were rolled back because one or more carriers failed to match.
The latest United hike appeared on its way to sticking Thursday afternoon, as all but US Airways and Northwest had matched it. Seaney expected them to join in by this weekend.
By comparison, the nation’s major carriers tried to hike fares en masse 23 times all of last year. Seventeen of them stuck.
“It’s been a torrid pace. We’re on pace to have more than 40 attempted increases and 28 successes this year,” Seaney said.
Seaney doesn’t expect that pace to continue in the second half of the year.
“As kids start to go back to school, it will be a soft period for travel, in general, so I don’t think there will be as many fare increases because airlines want to keep their planes as full as possible,” Seaney said, noting that airlines also will start seeing some dividends from their plans to reduce flights and impose new fees on customers, lessening their reliance on fare hikes.
Tom Fontaine can be reached online at tfontaine@timesonline.com.
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