Most Recent Airfare Hike Reduced In Half

The latest fare increase implemented by large American airlines has been cut in half because of the pressure felt from discount carriers.

Last week, major network carriers such as American, Continental, Delta and United increased many of their domestic fares by $20 per round trip ticket. However, the rise in cost had been lowered to $10 by Monday afternoon.

Five broad-based fare increases have already been attempted by the airlines this year. In fact, most of them adhered to the given price increase.

Larger airfare increases have been enforced twice on high-priced tickets often picked by business travelers. At that time, plane tickets were increased as high as $60 per round trip. On their third attempt, airlines failed to increase business fares.

CEO Rick Seaney of said that the latest rollback took place after low-fare airlines such as AirTran, Frontier, JetBlue and Southwest started raising fares to only half of the price increases of larger carriers.

The larger network airlines subsequently slashed their fare increases in half to prevent them from pricing more than their low-fare competitors, Seaney said.

In addition, he said that American airlines will keep on testing price increases in the following weeks to determine how much travelers will accept. Some of the analysts believe that airlines will shun customers away once they further increase prices on leisure tickets.

Even though airlines offer ticket sales, prices are still higher than last year. CEO Tom Parsons of said that Southwest carrier even increased its lowest sale price by $5 each way on short trips.

Airlines also increased fuel surcharges on flights involving United States and Europe. The charges went up from $360 to $400 a round trip, which tripled some of the airfares for travel in late March.

Categorized | Travel

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