The Hits Just Keep On Comin'

Paying attention to all that commotion with the American Airlines meltdown? Not watching your flank?

Heads-up! Gotcha!

United Airlines just slipped in a big fare hike when we were otherwise engaged. From Rick Seaney at FareCompare.com:

United Airlines Attempts to Hike Airfares for the 11^th Time in 2008

Wednesday, April 9, 2008 10:45pm CDT

After a brief ten day respite from airfare hikes -- in what can arguably be described as one of the worst 10 days in commercial aviation history – United Airlines tonight is attempting to hike airfares for the 11^th time this year.

With the backdrop of failing airlines, congressional safety hearings, soaring fuel prices and massive inspection related flight cancellations -- United has seen fit to hike U.S. domestic airfares by as much as $30 roundtrip this evening across it’s entire route system.

Unlike the previous 2 failed attempts in the last weeks of March by Delta airlines of $10 roundtrip across the board – United has taken a different approach this week by increasing airfares from $4 to $30 roundtrip loosely based on mileage with deference to those routes that have significant lower cost airline competition. This technique of laddering several layers of increases has been previously successful in mid March when United was able to get the other 5 legacy airlines to significantly match a $4 to $50 roundtrip increase.

United’s passenger traffic for March 2008 fell by 2.7% -- even with the popular Spring Break and Easter holidays -- sounding the alarm bell for the first significant sign of softening demand for air travel in 2008.

I have updated the FareCompare.com 2008 airfare hike timeline as follows:

· January 3^rd, initiated by United, $10 roundtrip, successful (sticky)

· January 11^th, initiated by United, $30 roundtrip, unsuccessful

· January 17^th, initiated by American, $20 roundtrip, unsuccessful

· January 24^th, initiated by Continental, $20 roundtrip, successful (sticky)

· February 22^nd, initiated by United, $10 roundtrip, successful (sticky)

· February 28^th, initiated by Delta, $10 roundtrip, successful (sticky)

· March 7^th, initiated by United, $10 roundtrip, successful (sticky)

· March 14^th, initiated by United, $4-$50 roundtrip, successful (sticky)

· March 19^th, initiated by Delta, $10 roundtrip, unsuccessful

· March 27^th, initiated by Delta $10 roundtrip, unsuccessful

· April 9^th, initiated by United $4-$30 roundtrip, pending

Both United and Delta have taken airfare hike leadership positions this year initiating the bulk of the 6 successful system wide increases in 10 attempts before this evening – tonight’s increase by United means that many travelers will be paying up to $130 roundtrip more than they did in the first week of January 2008 for domestic airline tickets.

I would expect Delta to match quickly tomorrow, since they have been thwarted recently – while the other four legacy airlines will most likely weigh their options on matching over the next few days.

I cannot stress enough that air travel consumers who have been on the fence about summer travel purchases -- lock in their tickets as soon as possible -- prices are not likely to go lower and are much more likely to continue an upward spike in the coming weeks.

I will send out further research notes if/when any significant matching or rollback activity occurs related to this increase.

Regards,

Rick Seaney

CEO, FareCompare.com

####