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Latest airfare hike cut in half

By Associated Press

POSTED:
LAST UPDATED: 09:56 a.m. HST, Mar 01, 2011



DALLAS >> The most recent attempt by U.S. airlines to boost fares has been cut in half by pressure from discount carriers.

Last week the big network carriers including United, Continental, Delta and American raised many domestic fares by $20 a round trip. By Monday afternoon, the increase had been cut to $10.

Rick Seaney, CEO of website FareCompare.com, said the rollback occurred after low-fare airlines Southwest, JetBlue, AirTran and Frontier began raising fares only half as much as the larger carriers. He said the network airlines then cut their increases in half to avoid charging more than their low-fare competitors.

Seaney said U.S. airlines will continue to test price increases in coming weeks to see how much travelers will tolerate. Some analysts believe airlines will drive customers away if they raise prices on leisure fares any higher.

The airlines have already attempted five broad-based price increases this year, with most of them sticking. They have also twice imposed bigger increases — up to $60 a round trip — on high-priced tickets favored by business travelers. A third attempt to raise business fares failed.

That means even when airlines offer sales the prices are higher than a year ago. Tom Parsons, CEO of Bestfares.com, said Southwest raised its lowest sale price on short trips by $5 each way.

Parsons also said airlines raised fuel surcharges on flights between the U.S. and Europe to $400 a round trip from $360. He said an advance-purchase ticket for travel between New York and Paris in late March cost $225, but the surcharge nearly tripled the cost of the trip.






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