Fare Hikes Take Their Toll Again in July

[kirkpatrick]

Opinion.... The capacity cuts already announced will probably be deeper.

Fact: Most of the cuts announced by many airlines haven't taken effect yet, so we haven't had a chance to see just how it will all shake out.

MK

 

[eolesen]

No, but with less than 30 days to go before most of them take effect, I'm guessing there's a pretty good idea based on looking at advance bookings and the number of fare specials I've had hit my inbox this week.

AA: "Say 'Farewell' To Summer – And 'Hello' To Fall Savings!
Cooler weather and warmer clothes aren't the only things you have to look forward to this fall. From now until November 20, you and your family can fly throughout the United States and Canada with fares starting as low as $51* each way, based on round-trip purchase. But hurry - you only have until August 8, 2008, to enjoy this amazing special."

Southwest: "Book Your Fall Travel Now starting at $49 one-way in select markets! Additional term, conditions, and exclusions apply."

 

[777 fixer]

AA

• July traffic fell 3.5% to 12.46 billion revenue passenger miles
• Capacity down 1.2% to 14.52 billion available seat miles
• Load factor down 2% to 85.8%

American Eagle

• Traffic fell 9.1% to 761.7 million revenue passenger miles
• Capacity fell 0.9% to 1.04 billion available seat miles.
• Load factor down 6.5 percentage points to 73.1%

And this is all before the schedule cuts....

How much of this is fare increases and how much is related to the economy?

 

[eolesen]

With some of the retail numbers coming out over the past couple days, it's probably more due to the economy.

Example... Back To School spending is way down vs. this time last year. Discounters like Walmart & Target are seeing more sales of essentials, and less spending on new shoes, clothes, etc. Mid-level retailers like Kohls, Gap, Old Navy, etc. are seeing the slowdown as well on new shoes, clothes, etc.

see http://www.bloomberg.com/apps/news?pid=206...Qs&refer=us for more commentary on this...

 

[777 fixer]

It doesn't take a Harvard MBA to figure out that the airliens are in a Catch 22 that's for sure. If they raise prices in a weak economy less people fly. If they don't they can't cover their costs.