After a four-month period that saw airfares remain relatively flat, United Airlines led a successful price hike of $4 to $10 per round-trip ticket less than two weeks ago, according to the Associated Press. After all the major domestic carriers and discount carrier Southwest matched the hike, the seventh price increase of 2012 was deemed a success. Now, FareCompare.com is reporting that United is again leading the industry into the eighth attempted price hike of 2012 by increasing fares by up to $10 across the majority of flights.
What is the reason for increasing fares two times in two weeks?
Airlines are offering a number of sales at the same time they are trying to push through increases, and according to USA Today, the discounts are offered on top of the increased airfares. That being said, even though the airfares are booked at a discount, the price ends up being higher than a discount offered on the normal airfare.
How is the fare increase going?
According to FareCompare.com, U.S. Airways, Delta, and American have matched the $10 price hike on 66 percent of routes offered, but Southwest Airlines remains the missing piece of the puzzle. Typically, Southwest matching the increase is a breaking point for the industry. If the low-cost carrier matches the hike, it is usually deemed a success; however, if Southwest, which includes AirTran, chooses to not make a fare adjustment, other airlines often roll back the increase to avoid giving the budget airlines another competitive advantage, according to the Los Angeles Times.
How many fare hikes have been successful in 2012?
Of the seven attempted airfare hikes in 2012, only four have been successful, according to FareCompare.com. The pace of attempted airfare hikes has slowed compared to 2011, which saw 15 attempts by this same time last year and 22 attempts all year. Of course, the rate of success is better this year with about half succeeding, while only nine fare hikes were successful last year.
How far have airfares risen in 2012?
According to MLive.com, average round-trip fares increased 4.8 percent in the first quarter of 2012 to an average of $373. That sum of cash represents an all-time high for domestic air travel in the United States, according to KIAH. However, regional differences do apply, since flights out of Cincinnati average around $530 while flights out of Atlantic City were averaging $157.
Jason Gallagher is a former travel professional with a decade of experience in the industry. He remains an avid traveler and hotel fan with exposure to technology and trends in properties across the United States.