New Fare Hike Gains Traction, But Will It Hold?

You can never tell for sure on a weekend whether any new round of fare hikes initiated by an airline at week's end will stick through Monday. Sometimes a spoiler will back out and then everybody runs for the hills. But looming $110-a-barrel oil has made the airlines less skittish in that regard.

The latest fare hike, another big one, is sticking so far, says Tom Parsons, the CEO of Bestfares.com. On Thursday, United filed a series of higher fares, from a $10 round-trip increase on short flights to $50 round-trip on flights over 1,500 miles. Continental followed the next day, and now American, Delta and US Air have too. Northwest -- which has been a spoiler in the past, but recently has tended to go along -- hasn't yet joined in. But the weekend is early.

Here is the latest from Parsons:

"" All Major Airlines Raise Airfares Except Northwest. Is This Fare Hike A Bust?

On the evening of March 13, 2008, United Airlines raised both leisure and business domestic airfares by $10 round-trip on flights up to 500 air miles, $20 on flights 501 to 1,000 air miles [ed. note: mileage measured each way on a round trip]; $30 on flights 1,001 to 1,500 air miles; and a whopping $50 round-trip on domestic flights over 1,500 air miles ...

On Friday March 14, 2008 Continental Airlines was the first major airline to match United Airlines airfare hike. “Today American Airlines, Delta Airlines and US Airways also jumped on board. The only holdout of the major airlines NOT to match is United Airlines airfare increase is Northwest Airlines.

“Northwest Airlines has been the spoiler on airfare increases many times in the past” says Tom Parsons, CEO and Founder of Bestfares.com, an internet travel website that tracks airfare changes and travel industry trends. It does not mean that Northwest won’t match these fare hikes tomorrow but as of today Northwest offers the cheapest business and leisure airfares up to $50 less than their competitor. “If Northwest elects not to match this aggressive airfare hike by Sunday March 16, 2008, this could force the other five legacy airlines to rapidly descend their new higher airfares” adds Parsons.

“If there is any good news for travelers, America now has many routes served by the low cost carriers. Due to the competitive nature of the airline industry in most instances, the major airlines are forced to offer lower competitive airfares on these routes. When comparing airfares in nearby competitive markets that are serviced by low cost carriers and comparing nearby alternative airports to non competitive markets some airfares can be better than half price” ...

"It should also be noted that since December 18, 2007, the major airlines had already successfully raised both leisure and business airfares by $70 roundtrip by either raising airfares or fuel surcharges. If this increase is matched by American, Delta, Northwest and US Airways, travelers flying over 1,500 airmiles on non-competitive routes will be paying as much as $120 roundtrip more on the same routes in less than three short months. Listed below are the airfare hikes and fuel surcharge increases the major airlines have made since December 18, 2007.

(1) Week of December 20, 2007: Major airlines raise fuel surcharges on leisure and Business Class fares from $10 roundtrip to $20 roundtrip. Total increase since December 18, 2007, $10 roundtrip.

(2) Week of January 7, 2008: Major airlines raise leisure and Business Class airfares by $10 roundtrip. Fuel surcharges still remain at $20 roundtrip. Total increase since December 18, 2007, $20 roundtrip.

(3) Weekend of January 24, 2008: Major airlines double fuel surcharges on leisure and Business Class airfares from $20 to $40 roundtrip. Total increase since December 18, 2007, $40 roundtrip.

(4) Weekend of February 22, 2008: Major airlines raise airfares on both leisure and Business Class airfares $10 roundtrip. $40 fuel surcharge still in place. Total increase since December 18, 2007, $50 roundtrip.

(5) Weekend of February 29, 2008: Major airlines raise leisure and Business Class airfares $10 roundtrip. Total increase since December 18, 2007, $60 roundtrip.

(6) Weekend of March 7, 2008: Major airlines raise fuel surcharges from $40 to $50 roundtrip. Total airfare increase with airfare hikes and fuel surcharges since December 18, 2007, $70 roundtrip.

(7) March 14, 2008: United & Continental Airlines raised both leisure and business domestic airfares by $10 roundtrip on flights up to 500 air miles, $20 on flights 501 to 1000 air miles, $30 on flights 1001 to 1500 air miles, and a whopping $50 roundtrip on domestic flights over 1,500 air miles one-way. On March 15, 2008 American Airlines, Delta Airlines and US Airways matched the new fare hike. ..."

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