3rd Domestic U.S. Airfare Hike in 6 Weeks

Tonight at 8pm EST Delta Air Lines (along with Northwest) initiated a domestic airfare hike of $10 roundtrip ($5 each way) across the bulk of its U.S. route system.

This domestic airfare hike marks the 3rd attempt in the past 6 weeks with the past 2 tries successfully sticking.

On yesterdays Q2 earnings call American Airlines CEO Gerard Arpey said he did some quick calculations on the back of an envelope and “figured that airlines needed about $17 more per one-way customer in the quarter to break even.”

If this domestic airfare increase sticks it would mean an increase of $20 to $25 each way domestically for the legacy airlines in the past 6 weeks. However this increase does not include international tickets nor the widely matched off-peak late summer/fall airfare domestic sale initiated by Southwest earlier this week.

Starting this past November through late May of this year airfare prices had been in a free fall, in June domestic airlines popped their chutes with a couple of airfare hikes — the big question is whether or not their is a hole in the canopy as demand in tough economic times is impossible to predict.

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Published: July 16, 2009