More Airfare Hikes in 2011: 3rd Domestic Airfare Hike in a Month

UPDATE: This evening (1-9-11), Delta Air Lines matched the airfare hike.

EARLIER: The third domestic airfare hike in the past month and the first of 2011 has been initiated by U.S. airlines.

Domestic airfares have been increased between $4 and $10 roundtrip ($2 and $5 oneway) based on flight distance.

Southwest Initiates Airfare Hike

The FareCompare proprietary airfare tracking software detected a relatively minor amount of airfare hike activity in Northern/Midwestern cities this past week which normally wouldn’t have been a significant event until late Friday evening when Southwest Airlines, who rarely initiates an airfare hike, jumped in across most of their routes.

Late Saturday evening almost all U.S. airlines with the exception of Delta matched the airfare increase including, American, United/Continental, US Airways and Frontier (expect Delta to match late on Sunday).

Most Dramatic Airfare Hikes Since 2007

We haven’t seen this pace of domestic airfare hikes since 2007 when fuel prices began to jump dramatically in last quarter and airlines began to institute fuel surcharges (domestic fuel surcharges were removed in November of 2008 as oil prices began to dip from a peak that summer).

These recent airfare hikes affect the typically slower travel period of January and February as most airline tickets are sold within 30 days of departure.

While fuel prices have been hovering near recent highs it appears these airfare hikes are more likely related to continued domestic capacity discipline along with strengthening demand.

There is no reason to believe that recent airfare hikes are in any way related to the recent spate of ticket distribution issues between online travel agencies, GDS and legacy carriers during the same time period.

Other Airline Fee Increases

We have also seen over the past few months a renewal of domestic peak travel surcharges between $10 and $30 roundtrip for 2011 travel. Peak travel surcharges, in addition to other airline fees,  have been a popular way the past few years for domestic airlines to raise ticket prices on selective high volume time periods around holidays and summer travel in 2009.

We will continue to update as significant changes occur.

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Published: January 9, 2011