Price increase seems to be over airlines
DALLAS – latest effort by airlines to raise fares broadly – going to the $ 4 to $ 10 per round trip within the United States – faltered on Monday, as some airlines have refused due to growth.
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United and Continental fare hikes began on Friday and most other airlines, went on first glance. But on Sunday, Southwest rollback increases, and the U.S. did the same thing on Monday morning.
"We have abolished this increase, because other airlines also pulled him back," said Tim Smith, a representative of the United States.
Rick Seaney, CEO of FareCompare.com, said Southwest's "waffling" over the weekend was "likely to disrupt this attempt by the price increase."
U.S. airlines raise domestic prices to the base several times in early 2011 to increase revenue, they are faced with rising costs of jet fuel. The last general tariff increase was in April.
Because the airlines are constantly running sales, the average fare paid by passengers often do not rise as much as indicated an increase in base fares. Southwest, etc. In recent launch aggressive sales in the fall, when travel demand falls.
Airlines may be reluctant to raise prices if they are afraid to drive passengers. Traffic growth fell in June for the two largest companies in the United Continental Holdings Inc. and Delta Air Lines Inc. Analysts say that fear of weakening demand hurt airline stocks.
Airlines often do not discuss why and when they raise prices, partly out of fear of violating laws that bar them from signaling pricing decisions with each other.
Airlines tried to raise fares more than a dozen times this year, with about half of the increases stick, but none since April.
Ray Neidl, an analyst with Maxim Group LLC, said it was surprising that airlines have tried to raise prices in the late summer for the slow autumn season. He said the uncertain economy will fare hikes difficult, and perhaps even more discount after Labor Day, "depending on how weak demand is."
Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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