Unusual Airfare Hike Succeeds

UPDATE IV: June 15 – The hike is declared a success. The most recent activity occurred Saturday (June 13) as American filed 470k increases. See the details in the complete timeline of the hike, below.

UPDATE III: June 12 – With American matching the latest increases, the hike is a success  – unless an airline gets cold feet over the weekend.

UPDATE II: June 12 – Southwest has expanded to a system-wide increase. At this pace, it’s looking like the hike will succeed.

UPDATE I: June 12 – See the latest additions to the timeline. This is one of the most unusual hikes I have ever seen; like a bar brawl in slow-motion.

Original post, June 10:

The way airlines raise ticket prices is changing. At least for now.

Airfare Hike Activity Changes

No longer do we have the broad-based hikes that we saw prior to 2015, which often occurred every couple weeks or so. Today, carriers are less apt to toss spaghetti on the wall every two weeks with distance-based price hikes that were usually rolled back within a few days (when one or more competitors did not match the new, higher fares).

What we have instead is hiking activity that is more measured and infrequent, typically targeting a segment like close-in travel or certain geographical areas instead of fares across-the-board.

Timeline: Latest Airfare Hike Activity

This is a time-line of the latest hiking activity that has raised fares on some routes up to $10 round-trip, but the volume of affected routes is relatively small; again, not a broad-based hike. [See the updates – it did in fact turn into a system-wide hike]

Here’s how it’s been playing out.

Last week:

  • 4-June, 10am EDT – JetBlue shows significant airfare increase activity
  • 4-June, 1pm EDT – American, Delta, United, Virgin America begin matching
  • 4-June, 4pm EDT – More matching, jockeying activity as airlines from American, Air Canada, Delta and Virgin America
  • 4-June, 8pm EDT – United and Alaska matching activity (Alaska usually does this for airline code share partners)
  • 5-June, 10a EDT – Southwest begins some matching

This week:

  • 8-June, 8pm EDT – Southwest shows significant hike activity
  • 9-June, 10am EDT – American, Delta and Virgin America show minor matching
  • 9-June, 1pm EDT – A smattering of matching from American and United
  • 9-June, 4pm EDT – Another smattering of matching from Alaska with a few tweaks by Southwest
  • 9-June, 10pm EDT – JetBlue starts matching, along with Alaska’s per-contract matching
  • 10-June, 10am EDT – A smattering of increases from United and Southwest
  • 10-June, 4pm EDT – Southwest and United tweak prices up and down
  • 10-June, 8pm EDT – Southwest increases more fares (about half of Tuesday’s number)
  • 11-June, 10am EDT – Southwest adds more routes (about a fifth of the original smallish fare filing)
  • 11-June,  8pm EDT  – Delta turns up the volume on hikes with 400+k fares increased, Southwest trickles more increases out
  • 12-June, 10am EDT – United matches Delta (this activity is now getting closer to a full blow system hike)
  • 12-June, 1pm EDT – Southwest expands to system wide hike (293k fares increased)
  • 12-June, 4pm EDT – American matches (and the hike is a success – unless a carrier gets cold feet over the weekend)
  • 13-June, 5pm EDT – American filed 470k increases (matching activity)

Why are Hikes Changing

Changing hike activity is likely an artifact of the reality that mergers have altered the competitive landscape to the point that four airlines now control 80% of the market. And these are airlines that have recently been swimming in profits.

Overall, domestic filing volume (volatility) is also down compared to last year. I haven’t seen enough activity to get too deeply into carrier motives for the latest fare changes – yet – but clearly, base fare filing activity has taken a back seat to schedule tweaks and inventory control, at least for the moment.

What This Means for Passengers

Any successful hiking activity means higher fares. It’s nothing to cheer about, but the fact that the volume of affected routes is relatively small (and not system-wide) means it’s no reason to stay home, either.

2015 Aifare Hike Timeline 6-15-15

Author:

Updated: June 15, 2015