Airlines' fare hike seems to falter
DALLAS – The latest effort by airlines to raise fares in general – increases from $ 4 to $ 10 per round trip in the U.S. – Failed Monday as some airlines were opposed to enlargement.
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United and Continental began to price hikes on Friday and most other airlines the fly at first. But on Sunday, Southwest reverse the increases, and the U.S. did the same Monday morning.
"We terminated the increase due to other airlines also pulled out," said Tim Smith, spokesman for the United States.
Rick Seaney, CEO of FareCompare.com, Southwest said "hot" the weekend was "likely to derail this attempt to increase prices."
U.S. Airlines raised domestic prices based on various occasions in early 2011 to increase revenues, as they face rising costs for jet fuel. The last general rate increase was in April.
Because the airlines are constantly running sales, the average price paid by passengers often does not rise as much as the fare increase set at the base. Southwest and others have recently put in place aggressive sales for the fall, when travel demand falls.
Airlines may be reluctant to raise prices if they fear scaring passengers. The traffic growth fell in June to the two largest companies, United Continental Holdings Inc. and Delta Air Lines Inc. Analysts said fears of weakening demand has hurt airline shares.
They usually do not discuss why or when prices rise, partly for fear of violating laws that prevent them from signaling including pricing decisions.
Airlines have tried to raise rates more than a dozen times this year, with approximately half of the increase of adhesion, but none since April.
Ray Neidl, an analyst with Maxim Group LLC, said it was surprising that the airlines tried to raise prices at this point in summer for the slower fall season. He said the uncertainty of the economy would be rate increases could be difficult and even more after Labor Day discount "in terms of how it becomes weak demand."
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
More Source:
Latest airfare hike begins to falter - USATODAY.comAirlines' fare hike appears to falter
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