This morning was crazy around the FareCompare.com office as Wall Street analysts and journalists began to call about Southwest Airlines raising prices over the weekend.
Raising prices is not normally a big deal, but when Southwest does it; it quickly becomes big news. Wall Street has been hammering on Southwest to increase revenue and they have been reluctant to increase even when the other major airlines have increased several times in the past few weeks.
Then when it couldnt get more hectic, US Airways filed a system wide increase which just added fuel to the fire.
A few things struck us as odd about the increase right from the start. We saw a news article on Bloomberg early this morning and it mentioned a 20$ roundtrip increase which is very high and odd. We checked our data and it turns out this increase was only on the walkup (0 day advance purchase) fares so their increase was really maxed out at $10 roundtrip except for emergencies and blatant procrastinators.
We did a complete analysis and sent the following to reporters and financial analysts (view full post to see the entire analysis):
US Airways Initiates System Wide Increase in the Wake of Southwest Increase
Monday, July 9, 2007 11:30am CDT
This morning in the 10:00am EDT airfare feed US Airways initiated a system wide increase of $1, $3 & $5 each way.
This increase follows hot on the heels of a Southwest airlines increase of $1, $3, $5 & $10 each way, matched by all major airlines over the weekend except US Airways.
We track the Southwest increases through matching activity of the major airlines in overlapping Southwest flight routes. It should be noted the $10 each way increase on matching airlines was only on walkup (0 day advance purchase) airfares and not across the board (so the Southwest $10 each way increase is likely only on walkup fares).
It is highly unusual for a major airline to initiate a system wide increase (US Airways) on a Monday. Most increases occur on Thursday evening giving the other major airlines a chance to match over the weekend.
Historically airfare sales begin to occur in August for travel departing in late August through mid November which is normally a softer travel time period. The airlines willingness to maintain increases at this point may point to a change in this historical pattern of slower travel during this time period.
The history of this weekends airfare increase activity is shown below:
|
Time
|
Match
|
Description
|
| 10:00am EDT Friday |
|
Continental decreases 1500 markets (less than 6% of total) by $5 each way (mostly smaller markets outside of the top 50 cities) |
| 10:00am EDT Friday |
|
Delta decreases 403 markets (less than 3% of total) by $5 each way (mostly smaller markets outside the top 50 cities) |
| 12:30pm EDT Friday |
|
No Significant Activity |
| 8:00pm EDT Friday |
|
Delta decreases 499 markets (less than 3% of total) by $5 each way (smaller cities). |
| 5:00pm EDT Saturday |
Southwest Match
|
American increases 944 markets (less than 5% of total) by $1, $3, $5 & $10 ($10 only on walkup 0 day advance purchase) each way in 98+% of Southwest markets |
| 5:00pm EDT Saturday |
Southwest Match
|
United increases 865 markets (less than 5% of total) by $1, $3, $5 & $10 ($10 only on walkup 0 day advance purchase) each way in 98+% of Southwest markets |
| 5:00pm EDT Sunday |
Southwest Match
|
Continental increases 2538 markets (approximately 20% of total markets) by $1, $3, $5 (no $10 increases) each way in 98+% of Southwest markets and they also added increases to non Southwest markets |
| 5:00pm EDT Sunday |
Southwest Match
|
Delta increases 942 markets (less than 3% of total) by $1, $3, $5 & $10 ($10 only on walkup 0 day advance purchase) each way in 98+% of Southwest markets. |
| 5:00pm EDT Sunday |
Southwest Match
|
Northwest increases 3354 markets (less than 15% of total) by $1, $3, $5 & $10 ($10 only on walkup 0 day advance purchase) each way in 98+% of Southwest markets and they also added increases to non Southwest markets |
| 10:00am EDT Monday |
|
American increases 2285 markets (less than 15% of total) by $1, $3 & $5 each way mostly in non overlapping Southwest markets |
| 10:00am EDT Monday |
|
Delta increases 600 markets (less than 2% of total) by $1, $3 & $5 each way mostly in non overlapping Southwest markets |
| 10:00am EDT Monday |
System Wide Increase
|
US Airways increases 11,438 markets (system wide) by $1, $3 & $5 each |
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