Tag Archive | "american airlines"

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 FareCompare.com 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 Bestfares.com 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.

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Business Travel Regains as Economy Gets Better

American companies are expecting a 5-percent increase in their total travel expenditures this year. The rise is twice the growth rate last year just after a two-year decline in business. This shows a positive sign in the economy, thus perking up airlines, hotels, as well as car-rental companies.

Companies spent around $228 billion in business travel last year. The slight boost helped American airlines place their first collective earnings in three years. Reports showed increasing profits at various hotels like Marriot and Hyatt, including car-rental establishments.

Industry officials say the come back of corporate retreats is the most important sign of recovery. At the bottom of the recession, corporate retreats had disappeared as part of business companies’ effort to cut down overspending while the economy was weakening.

Travel is an important part of company’s success, according to corporate managers and executives. They send workers such as salesman, as well as top executives on the road to let their clients know they are valuable. Today, many companies travel budget are almost back to pre-recession state.

The economic output of United States returned to the pre-recession state in the last quarter of 2010. It is also predicted to grow more in 2011.

However, business travel outflow isn’t likely to come back to its pre-recession state until mid 2013 since companies are asking their workers to travel thriftily, said Michael W. McCormick, the Global Business Travel Association executive director.

Business travel managers tell their employees to stay fewer nights and at less extravagant hotels, hire smaller cars and get cheaper air flights.

The success of the travel industry has always been closely related to the country’s economy, as well as corporate spending. Generally, convenience is the greater concern of most business travelers than price. Since business traveling is back, the travel industry is also getting significant benefits.

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