More Good News...if It Sticks!

[ualdriver]

Each time fares go up a bit, I've read that it adds about 100M-200M to UAL's bottom line.........But will this one stick? This has to be the 5th fare increase in recent memory. Will rising airfares, whether for rising oil prices or just plain trying to increase revenue, drive away passengers?


http://biz.yahoo.com/ap/050514/air_fares.html?.v=2

U.S. Carriers Raise Fares by $10 to $20
Saturday May 14, 12:28 am ET
By Brad Foss, AP Business Writer
Stung by Rising Fuel Costs, U.S. Carriers Raise Airfares by $10 to $20 Roundtrip in Most Markets...........

The latest round of fare increases was launched by AMR Corp.'s American Airlines, which increased ticket prices systemwide on Wednesday night by $2-$6 roundtrip. Delta Air Lines Inc. upped the ante on Thursday by raising roundtrip fares by $10 to $20. American then mimicked Delta Friday morning, according to AMR spokesman Tim Wagner.

By Friday afternoon, the moves were matched to one degree or another by Northwest Airlines Corp., UAL Corp.'s United Airlines, US Airways Group Inc., America West Holdings Corp. and Continental Airlines Inc., Wagner said.

 

[mwa]

even if it does - many people have already purchased for summer and the fare wars commence anew in sept.

 

[casual rat]

I dunno, I just saw a passenger's ticket that cost them $14.77 one way fare from DFW to DEN (on an orbitz.com deal on UA) after taxes--actually, the taxes amounted to more than the fare did--go fig....Hell if I was a transient willing to relocate, I'd have to seriously consider it over hitch-hiking. As an 'Executive', I'd still blame our Industry's distress on 'Labor' and fuel costs though--not the 'determined' reality of underpricing the product/service.

 

[JungleClone]

A fare increase of $5 or $10 is not going to impact demand all that much. The problem, as it always will be, is getting major competitors to match. Herein lies the hyprocisy of this industry. All the airline CEO's bemoan the "over capacity" in the industry, and the major airline CEO's cry about all the "low fares". Yet, when push comes to shove and one tries to push through a modest fare increase, nobody matches. It's just another concrete example of an insane industry run by morons who don't have an ounce of business sense.

 

[casual rat]

Why not raise fares by $10-$15 and not worry about what everyone else does? LCCs are determining the Marketplace because the Legacies let them. How much revenue are you going actually to lose? I'm sure an abacus operator somewhere could point out millions, but... in reality? Let the LCCs pay for denied boardings and inconvieniencing the passenger. Certainly with the losses being incurred, matching fares with the competition doesn't seem to be working.

 

[Bob Owens]

Why not raise fares by $10-$15 and not worry about what everyone else does? LCCs are determining the Marketplace because the Legacies let them. How much revenue are you going actually to lose? I'm sure an abacus operator somewhere could point out millions, but... in reality? Let the LCCs pay for denied boardings and inconvieniencing the passenger. Certainly with the losses being incurred, matching fares with the competition doesn't seem to be working.

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Hmmm, obviously MWeiss and FWAAA did not read this thread.

Ive been argueing that for some time. They claim that if AA or UAL raise fares by even $5 that everyone that wants to fly will cram on to JET Bles 60 airplanes. Then they start quoting economic theories to "prove" their position but leave out half the story.

 

[casual rat]

Let them CRAM....there's only so many seats. In the long-term, profits may be seen. For $10, I'll take my chances on not sitting next to the stressed out sweaty guy....