The major U.S. airlines will Increase fares for the seventh time this year, following a $10 round-trip price increase by United Continental Holdings Inc. and a rival carrier delta airlines move to recalibrate pricing.
Fare experts said Delta started the latest increase on Monday, which was matched immediately by American and a day later by United, Continental and US Airways.
Delta airlines confirmed the price hike but declined to give a reason. United, Continental and US Airways confirmed that they too raised prices.
FareCompare.com Chief Executive Rick Seaney on Tuesday said he expected Delta to come back with a $10 match, followed by US Airways. And Delta and US Airways indeed matched the $10 hike shortly after noon today.
American Airlines spokesman Ed Martelle said the increases covered first-class, business-class and tickets purchased up to seven days before travel. Flights up to 500 miles were boosted $20 each way, those from 501 to 1,500 miles were raised $40 each way, and flights longer than 1,500 miles increased by $60 each way, he said.
Rick Seaney, CEO of FareCompare.com said low-fare airlines wouldn't be able to block this increase because the tickets are sold at prices far higher than the discount carriers were already charging.
Airlines also claim that demand for leisure travel will be hurt if passenger fees for security and airport improvements are raised, as President Barack Obama proposed in his budget this week.
The proposed increases would add a few dollars per flight to the cost of a ticket, but Baker said it could reduce revenue especially at airlines such as Southwest, which cater to price-conscious travelers.
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