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In this evenings 8:00pm EST airfare distribution, all legacy airlines including American, Continental, Delta & US Airways — except Northwest Airlines — matched the $10 roundtrip increase initiated by United Airlines at noon today on the bulk of their respective route systems. American Airlines continues to be wary of increases on popular overlap Southwest Airline routes touching certain cities. (Dallas) In previous increase attempts Northwest Airlines has been last to match — I fully expect them to match the increase by close of business on Monday. As noted in previous research notes the fundamentals for sticky airfare hikes firm demand, limited capacity and record fuel prices remains in place. I would expect this particular increase to be relatively sticky and wouldnt be surprised to see at least one more increase this quarter. |
Recently reported January unit revenue for the major airlines as a group was up sharply over the same time period last year with similar passenger loads reflecting the effect of two sticky airfare hikes this January and seventeen sticky increases in 2007.
Domestic air travelers are in for some significant change in the coming year deals will be fewer and farther between especially for non-flexible travelers and the looming implementation of multiple legacy airline mergers is likely to stretch the currently strained air travel experience to its snapping point.
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