Back to Back Domestic Airfare Hike Attempts

FINAL UPDATE – 10am EST, Feb. 28: The 4th airfare hike attempt of the year has failed. By yesterday afternoon, the hike was almost completely rolled back.

UPDATE – 11:10am EST, Feb. 27: Last week’s domestic $4-$10 round-trip airfare hike attempt – the second in as many weeks – began collapsing over the weekend as signs of weakness set off a series rollbacks despite several days of tenuously holding on without low-cost airline support.

On Saturday (Feb. 25), United – the initiating carrier – started partially peeling back prices on some routes and then rolled back even more on Sunday, accompanied by US Airways.

An hour ago – American, Delta, Frontier and Virgin America began rollbacks across their route systems as well.

Just ahead of this collapse – on Friday – Southwest raised some routes by $10 round-trip for travelers buying tickets at the last minute (less than a 7 days advance purchase) – which are typically seats sold to business travelers who pay more than twice the rate of leisure passengers.

Air travelers are likely to experience a more gradual increase in domestic airline ticket prices than prices at the pump – at least for the next few months until summer buying frenzy hits – as carriers continue to meet fairly stiff resistance to higher fares in their quest to recoup fuel costs.

PREVIOUS – February 23: On Tuesday evening (Feb. 21) at 8pm EST, United/Continental increased domestic prices by $4 to $10 roundtrip or $2 to $5 each-way on the bulk of its combined route system. The smaller increase is on the shorter routes.

Fourth Hike of 2012

This hike attempt marks the fourth of 2012 and is on the heels of a broadly successful $10 roundtrip increase last week – which occurred after a month of little or no increase activity.

Virgin America matched at 10am eastern Wednesday, Delta at 1pm eastern, American at 4pm and US Airways at 8pm with United/Continental also adding more routes at that time.  Today Air Canada has matched at 10am and Frontier at 1pm eastern.

Which Way will Low-Cost Carriers Jump?

Southwest and JetBlue have not matched as of 1pm eastern today.

Oddly enough at 1pm eastern on Wednesday, JetBlue actually dropped base prices (outside of sale fares) amidst all the hiking activity of the legacy airlines.

Meanwhile, if Southwest decides not to jump in – the legacy airlines will have to decide to rollback or to tip toe around their 100+ city route network which has become increasingly harder to do since its take-over of AirTran.

It will not be easy for airlines push through fuel-related hikes on consumers whose discretionary income is being assaulted by higher gasoline prices – that said, it is pretty clear that demand isn’t an issue for airlines. At least, not yet.


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Published: February 23, 2012