Airline ticket prices have increased significantly due to rising oil prices and improved economic conditions, the effect is most felt the more expensive fare back-to-back flights. Rick Seaney, FareCompare.com CEO stated that there have been two industrywide fare increases this new year and the fourth since mid-December.
The most recent came Monday, when Delta raised fares up to $20 for a round trip and United raised them up to $10 for a round trip on most domestic routes. Most other carriers followed suit. The stream of increases means it could cost up to $35 more to fly on some routes than it did last year, says Seaney, who closely tracks fares. Airline executives, who this week began reporting earnings for the last quarter of last year, say a key reason for the hikes is the escalating cost of oil.
"The most worrisome threat we see on the horizon right now is the price of fuel," Gerard Arpey, CEO of American Airlines, said in a letter to employees Wednesday. He said American expected fuel costs to rise more than $1 billion this year and that "We will need to find ways to raise revenues to offset the impact."
Richard Anderson, Delta's CEO, said Tuesday that his airline would have to "pass on these higher fuel costs to our customers."
Often when airlines boost ticket prices, a low-cost carrier stays put, forcing prices to eventually go back down. But Southwest, a traditional holdout, has been going along or even taking the lead in recent increases. The carrier initiated an industrywide fare increase on Jan. 7, then raised prices again this week after Delta and United did.
"Southwest has been the stick in the mud over hikes in the last three or four years," says Seaney, who called its two increases this month "unusual." "Southwest is acting more like a (traditional network) airline."
Southwest's increases, ranging from $2 to $5 each way, "help offset higher fuel costs," says Southwest spokeswoman Whitney Eichinger.
"We prefer to be transparent by increasing our fares as opposed to tacking on fees for things that should come with the price of a ticket, like changing your mind or checking two bags," she says.
If oil prices continue to rise, Seaney says, airlines are likely to keep rolling out price increases, as well as charge extra to travel on popular days and for other services.
"The most worrisome threat we see on the horizon right now is the price of fuel," Gerard Arpey, CEO of American Airlines, said in a letter to employees Wednesday. He said American expected fuel costs to rise more than $1 billion this year and that "We will need to find ways to raise revenues to offset the impact."
Richard Anderson, Delta's CEO, said Tuesday that his airline would have to "pass on these higher fuel costs to our customers."
Often when airlines boost ticket prices, a low-cost carrier stays put, forcing prices to eventually go back down. But Southwest, a traditional holdout, has been going along or even taking the lead in recent increases. The carrier initiated an industrywide fare increase on Jan. 7, then raised prices again this week after Delta and United did.
"Southwest has been the stick in the mud over hikes in the last three or four years," says Seaney, who called its two increases this month "unusual." "Southwest is acting more like a (traditional network) airline."
Southwest's increases, ranging from $2 to $5 each way, "help offset higher fuel costs," says Southwest spokeswoman Whitney Eichinger.
"We prefer to be transparent by increasing our fares as opposed to tacking on fees for things that should come with the price of a ticket, like changing your mind or checking two bags," she says.
If oil prices continue to rise, Seaney says, airlines are likely to keep rolling out price increases, as well as charge extra to travel on popular days and for other services.
Original Sources : http://www.usatoday.com/travel/flights/2011-01-20-1Aairfares20_ST_N.htm
