VOL. 126 | NO. 37 | Wednesday, February 23, 2011
Big Airlines Try to Raise Fares Again
DAVID KOENIG | AP Airlines Writer
DALLAS (AP) – Major U.S. airlines are trying to revive fare increases for high-end tickets after failing to impose bigger price increases last week.
The move comes as airlines worry about the prospect of higher jet fuel prices. Oil prices surged to their highest levels in more than two years Tuesday as violence in Libya raised fears that oil production could be threatened there or in other OPEC countries.
American, United, Continental and US Airways raised prices Monday by $20 to $60 per round trip on some tickets favored by business travelers.
Delta Air Lines, the last holdout among the largest so-called network airlines, matched the increase Tuesday, making it more likely to stick.
If even one major airline refuses to go along, fare increases can collapse. Last week a Delta-led effort to boost high-end tickets by $40 to $120 per round trip failed when US Airways first matched the increase and then abandoned it. Such a reversal could still happen again this week.
The airlines are dealing with roughly a 50 percent increase in prices for jet fuel in the past year.
American Airlines spokesman Tim Smith confirmed that his airline raised prices at midday Monday, adding that he believed American was the first carrier to do so. Delta and US Airways also confirmed matching the increase. Fare watchers said United and Continental raised prices, too, but parent United Continental Holdings Inc. did not comment immediately.
This week's increases cover first-class seats, economy seats that can instantly be upgraded to first-class, and so-called walk-up fares – tickets bought the day of travel. Such seats are believed to be a small portion of tickets sold by airlines, but they command very high prices.
JPMorgan Chase analyst Jamie Baker said demand for such tickets is less sensitive to fare increases because the pricey seats are typically favored by corporate travelers.
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