DALLAS-The most recent fare hike by US airlines has been cut in half by pressure from discount carriers.Last week the big network carriers including United, Continental, Delta and American raised many domestic fares by US$20 a round trip. By Monday afternoon, the increase had been cut to US$10.The airlines have already attempted five broad-based price increases this year, with most of them sticking. They have also twice imposed bigger increases-up to US$60 a round trip-on high-priced tickets favoured by business travellers. A third attempt to raise business fares failed.
Rick Seaney, CEO of Web site FareCompare.com, said the most recent rollback occurred after low-fare airlines Southwest, JetBlue, AirTran and Frontier began raising fares only half as much as the larger carriers. He said the network airlines then cut their increases in half to avoid charging more than their low-fare competitors.Seaney said US airlines will continue to test price increases in coming weeks to see how much travellers will tolerate. Some analysts believe airlines will drive customers away if they raise prices on leisure fares any higher.
Even when airlines offer sales the prices are higher than a year ago. Tom Parsons, CEO of Bestfares.com, said Southwest raised its lowest sale price on short trips by US$5 each way.Parsons also said airlines raised fuel surcharges on flights between the US and Europe to US$400 a round trip from US$360. He said an advance-purchase ticket for travel between New York and Paris in late March cost US$225, but the surcharge nearly tripled the cost of the trip. (AP)