UPDATE (7-22-11): The domestic airfare hike initiated Wednesday has failed; it faltered as Delta and American started rolling back today. The only support for the hike came from the four legacy airlines without any participation from low cost airlines including Southwest/AirTran, JetBlue and Frontier.
The two failed hikes in as many weeks underscore how difficult it is to raise base ticket prices leading into the typically softer fall travel time period, coupled with a choppy economic backdrop and requirement to fill planes to the gills.
Another factor in these recent hike attempt failures is the reticence of domestic airlines to be uncompetitive in the marketplace for any length of time; being on page 20 of a comparison shopping site’s results can quickly change booking patterns on a given route.
Another Airfare Hike Attempt
On the heels of a failed hike airfare hike attempt over the weekend, American Airlines initiated a new system-wide domestic airfare hike of $10 to $20 roundtrip, just as their second quarter investor call was getting underway yesterday (July 20).
Delta began matching the increase shortly after that at 1pm eastern time and by 8pm eastern United/Continental also began matching. Alaska Airlines has now matched as well.
This is the 14th attempted system-wide domestic airfare hike of 2011 and the first to have a portion of the routes increased by $20 roundtrip; many of these increases are for smaller regional cities which had seen some minor price breaks earlier this summer, coupled with longer haul routes.
Listen as FareCompare CEO Rick Seaney chats with editor Anne McDermott about the down-and-dirty details of an airfare hike.
This latest increase attempt appears to be addressing some of the issues that scuttled the previous stab at raising prices this past weekend where airlines had trouble staying competitive in certain pockets of markets.
In Midst of Hike, Airlines Launch Airfare Sales
In the midst of hiking base-level airfares, domestic airlines are also tossing out and matching a variety of airfare sales, most targeted at off-peak Tuesday and Wednesday fall departures, underscoring the dance airlines must do to fill those empty middle seats every day of the week.
I have updated our 2011 domestic airfare hike timeline below: