Airlines Try Yet Another Fare Increase

Six weeks into the new year, U.S. airlines have attempted five air fare hikes. That’s as many as they tried in all of 2015. 

The latest hike of $10 roundtrip was initiated by Southwest in the afternoon of Feb. 19. Within four hours, American, Delta, and United had matched the increase, and it appears to be holding steady, according to FareCompare. 

Business travelers, late shoppers, and residents of smaller cities will bear the brunt of the increases. FareCompare said hikes have not been detected on “hotly contested” routes.  

If the increase sticks, the airlines will have raised roundtrip fares by $22 so far this year. Two of the attempts have failed. 

The airlines are under increasing pressure from investors to squeeze every nickel out of every square inch of aircraft, and are likely to try more hikes, FareCompare said.

The current economic climate and the steady demand for travel means they are meeting with less resistance than they did last year. 

FareCompare noted that the price of oil has dropped from $36 to $30 a barrel since the beginning of the year. Oil-producing countries such as Saudi Arabia and Venezuela have said they will cut production to boost prices if other countries follow suit, but newly unfettered Iran is likely to resist such a move.  

Here is the scorecard so far:  

Jan. 4, up to $6 roundtrip, initiated by Delta. 

Feb. 3, $6 roundtrip, initiated by JetBlue, failed. 

Feb. 10, $6 roundtrip, initiated by JetBlue. 

Feb. 18, $6 roundtrip, initiated by Delta, failed. 

Feb. 19, $10 roundtrip, initiated by Southwest, in progress.  

Pic: Colin Brown