Friday, January 01, 2010

Happy New Year: Revelers Raise Glasses; Airlines Raise Fares

Rick Seaney's New Years bells went off a little early when the fare-tracking system at noted "unusual activity" Wednesday night in the airline fare systems.

Yup, one after the other into the final day of the year the major airlines quietly raised prices.

Here's the alert he issued today:


"At 8 pm Eastern time Wednesday evening the proprietary airfare tracking system detected unusual system wide airfare hike activity initiated by United Airlines. Over 15,000 United city pairs were increased by $6 and $10 roundtrip ($3 and $5 each way). The increase covered the bulk of United’s domestic route system -- mainly at the $6 roundtrip level.

Yesterday (New Years Eve) the remaining legacy airlines began to match including American, Delta/Northwest, US Airways, Continental and Alaska.

Airfare hikes typically occur on Thursday evenings, but New Years is special case as no domestic airfares are distributed today.

The hike did not have any effect on a variety of airfare sales in the domestic system for travel through early March. Legacy airlines also tiptoed around overlapping low-cost airline routes (Southwest, JetBlue, AirTran) as the group has yet to participate in the hike.

This increase represents the 4th successful hike of 2009 compared to fifteen in 2008 and seventeen in 2007 – all since mid 2009.

The legacy airlines also have in place over 30 departure days where “peak travel” surcharges are applicable for travel in the first half of the year ranging from $10 to $30 each way.

Airline executives have been ranging from cautious to cautiously optimistic about overall air travel demand for the first 2 quarters of 2010 – while continuing to fret over the slow return of the lucrative business travel sector. Many executives have also signaled that domestic airfare is going up in 2010 barring any major change in current demand trends.

It is very rare to see all legacy airlines match a hike in such a short time span and have the hike fizzle – that said if any major changes occur on this increase we will send out an update."


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