Starting last night, Delta signaled a $5 increase. This one may stick as a few of the usual suspects have already matched.
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Delta tries another fare increase
By IAG | May 11th, 2007 | Posted in air fares | No CommentsStarting last night, Delta signaled a $5 increase. This one may stick as a few of the usual suspects have already matched.
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Funniest airline pricing in the US – maybe ever
By IAG | May 8th, 2007 | Posted in air fares | No CommentsHeard about Midwest Express' attempt to increase fares by $1 today?
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US Airways Completely Rolls Back Increase
By IAG | May 7th, 2007 | Posted in air fares | No CommentsIn this morning's update US Airways rolled back all of the $5 (one-way) increases it had filed Friday night. US Airway's decision puts into question whether this round of increases will stick. Based on previous fare initiatives of this scale, once a carrier pulls back completely, it is typical for the other carriers follow.
Delta and United also partially rolled back their increases in the same update.
There are updates at 12:30 and 8 pm today.
Neil Bainton, COO – FareCompare.com
Nickle & Diming
By IAG | May 6th, 2007 | Posted in air fares, ife, service | No CommentsWe have written about this before – but it seems to be a growing trend. For a frequent flier, the solutions are straight forward though.
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Delta and Northwest Match $5 Increase
By IAG | May 4th, 2007 | Posted in air fares | No CommentsIn this afternoon's update, both Delta and Northwest matched Continental's $5 one-way increase. Delta's $5 increase affects 812 of the top 1,200 markets in the US and Canada. Northwest's $5 increase affects 245 of the top 1,200 markets in the US and Canada.
Based on past initiatives, it is likely that United and US Airways will file their matching fares this evening. The remaining lynch pin for the success of this increase is Southwest Airlines. Southwest has not matched the previous four system-wide increases this year, making it difficult for the increases to stick. Southwest did raise fares by $1 and $2 last Friday, but it is difficult to predict how the company will respond to this latest fare initiative.
In the same update, Delta rolled back yesterday's $25 and $50 increase on walk-up fares by $20 and $45 respectively, thereby matching the Continental $5 one-way increase in these markets.
Neil Bainton, COO,
FareCompare.com
Continental Raises Fares $5
By IAG | May 4th, 2007 | Posted in air fares | No CommentsThis evening Continental raised fares system-wide by $5 one-way . The increase applies to walk-up, 3-day, 7-day, 14-day and 21-day fares. The increase affects 777 of the top 1,200 markets.
It is common for carriers to file system-wide increase on Thursday night in order to give other carriers time over the weekend to decide whether or not to match the increase.
This is the fifth attempt at a system-wide increase this year (see chart here). The last increase by Delta Air Lines on March 22 met with limited success. All fare increases so far this year have had difficulty sticking with the increases either being partially or completely rolled back. In contrast, the two increase by Southwest airlines so far this year have stuck.
While increases so far this year have not had much success, this round by Continental may have greater holding power. We are entering the high travel season and overall price levels are below 2006 and 2005 for this time (see chart here). Earlier today, FareCompare's national airfare index stood at 434. The index was at 471 on May 3, 2006 and 468 on May 3, 2005.
I will send updates as other carriers match the increase.
Additional Fare Increase News
Last night (May 2) United raised walk-up fares by $25 and $50 one-way in 134 of the top 1,200 markets. This afternoon US Airways matched the increase in 22 top markets and this evening Delta matched the increase in 99 top markets
On Friday, April 27th Southwest Airlines raised fares by $1 and $2 one-way in approximately 25% of the markets it serves. The Southwest increase was matched by all carriers.
Neil Bainton, COO
FareCompare.com
Airlines Get Some Relief – Southwest Raises Fares $2
By IAG | April 29th, 2007 | Posted in air fares, southwest | No CommentsFriday evening Southwest Airlines raised fares by $2 one-way in approximately 40% of its markets. All of the network carriers matched the increase over the weekend in overlap markets. This is Southwest’s second increase this year. Network carriers have tried to raise prices system-wide four times this year with limited success, in large measure due to the lack of participation by Southwest. With Southwest leading this increase, it is very likely it will stick.
While this increase is limited to $2 one-way*, it applies to all advance purchase fares (walk-up, 3-day, 7-day, and 14-day) and allows the network carriers to increase their floor prices in affected markets.
Southwest last increased fares on February 9, when it raised fares by $3 one-way for travel under 1,000 miles and $10 one-way for travel over 1,000 miles. The increase applied to all Southwest markets, but was limited to fares with advance purchase of 7 days or less. This increase was immediately matched by all of the network carriers.
*The increase is primarily $2 one-way. In approximately 10% of the markets affected, fares were increased by $1 one-way.
Network carriers: American, Continental, Delta, Northwest, United, and US Airways.
Neil Bainton, COO FareCompare.com
Air Canada raises fares $4 one-way
By IAG | April 19th, 2007 | Posted in air fares | No CommentsAir Canada raised fares across its network last night by $4 one-way. The increase affects 153 of the top 1,200 markets in the US and Canada. United matched Air Canada in overlap markets.
The increase applies to 0, 3, 7, 10, and 21 day advance purchase fares.
This is the fifth attempt by Air Canada to raise fares this year. Three of the previous attempts (Mar 15, Mar 5 & Jan 9) failed and the increase on Jan 17 was marginally successful.
Neil Bainton, COO
FareCompare.com
Nickel and diming is coming
By IAG | March 28th, 2007 | Posted in air fares, southwest | No CommentsCEO Gary Kelly says the airline needs to generate more revenue without "nickel-and-diming customers" or raising fares again. But of course the speech he gave mentioned that the airline’s costs are up 25% in the past five years mainly because of higher fuel costs that need to be offset. Southwest is not going to raise fares 25%, but it will embark on a process to get a greater share of your wallet. The example US airlines are about to follow is Ryanair.
This means that Southwest’s customers can expect some new fees to offset these cost increases. Following the highly successful Ryanair, which has fees for many things that are free elsewhere, Southwest is about to embark on the same route. For example, a pre-assigned exit row seat for an extra $10. Consider this an upgrade.
Southwest is not the first US airline to go down this road. Spirit already did, by charging for checked bags. This is also something Ryanair has been doing. Once Southwest starts down this road, the other airlines will follow. Why? Because Southwest determines fares in every market it flies. It is flying in many markets now and has the ability to decide how the industry charges. It is that big an airline today.
The impact could be significant. While it is true that fuel costs are up again, with the US Navy and the Iranian forces playing a game of chicken, airlines are also being impacted by other costs. Particularly labor costs. For years airlines have hammered out labor costs, but there is no cost savings from labor anymore. The truth is, airlines need to be more creative on the revenue side. Following the Ryanair model is therefore a good thing. The days of cheap fares may be over in America.
American travelers may as well get comfortable with the menu of new pricing options. Given that so much of Southwest’s seats are sold online, it is relatively easy to add a button to click on their site to get the “upgraded” seat. It will be less easy for less web-dependant airlines, but it can be done. Similarly, adding a fee for a checked bag is not hard work.
If one assumes the typical fare costs $200, adding a bag charge of $10 increases revenue by 5% with no ticket price impact. This means that airfare displays can appear cheaper than the real cost. Add on a charge for food and drinks and one can quickly see the impact of "nickel-and-diming customers". Simply put, it works. It is quite possible that Southwest could create a 5% system wide revenue increase by adding fees for small things. Once this genie is out of the bottle, it will never go back.
