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April 4, 2008

Northwest, Meet Pinocchio

Filed under: Airfare Increases, Northwest — Rick Seaney @ 5:39 pm

Good news for consumers — the Thursday evening “witching” hour for airfare hikes passed, with no system-wide airfare hikes.

Which got me to thinking, especially after an airline analyst showed me this recent statement about Northwest Airlines.

A portion of the statement, attributed to Northwest, says:

“In addition, for domestic routes, since Jan. 1, Northwest said it has participated in 11 attempts by carriers to increase fares to reflect rising fuel costs. However, most fares have been rolled back because some airlines failed to match, the company said.”

So fares didn’t go up much in 2008, huh?

Oh, Northwest; 4 Pinocchios for you! Keep reading, and I’ll explain.

Northwest significantly matched 6 of the 10 attempted airfare hikes of 2008 — and 6 of those hikes were successful (or “sticky” as I like to say). Here’s the list:

  • January 3rd, initiated by United, $10 roundtrip, successful (sticky)
  • January 11th, initiated by United, $30 roundtrip, unsuccessful
  • January 17th, initiated by American, $20 roundtrip, unsuccessful
  • January 24th, initiated by Continental, $20 roundtrip, successful (sticky)
  • February 22nd, initiated by United, $10 roundtrip, successful (sticky)
  • February 28th, initiated by Delta, $10 roundtrip, successful (sticky)
  • March 7th, initiated by United, $10 roundtrip, successful (sticky)
  • March 14th, initiated by United, $4-$50 roundtrip, successful (sticky)
  • March 19th, initiated by Delta, $10 roundtrip, unsuccessful
  • March 27th, initiated by Delta $10 roundtrip, unsuccessful

I went back to our database (one of the world’s largest) of current and historical airfare information and compared all the airfares published by Northwest Airlines from January 2, 2008 to April 3, 2008 (in case you’re wondering, no airfares are filed on New Years Day).

With a nod to the Washington Post’s famous rating system, I am going to give Northwest’s statement a whopping 4 Pinocchios.

The following chart from our database clearly shows that most domestic airfares from Northwest Airlines are up from $30 to $120 roundtrip for both leisure and business travelers since January 2, 2008.

Some additional observations:

  • The bulk of Northwest passengers are paying at least $30 or more roundtrip compared to January 2, 2008
  • Approximately 2/3 of all Northwest passengers are paying at least $50 or more roundtrip compared to January 2, 2008
  • A little over 1/3 of all Northwest airline passengers are paying at least $90 more roundtrip compared to January 2, 2008
  • A negligible amount of Northwest passengers are paying less than they did on January 2, 2008
  • In covering airfares for over 6 years, I have never seen a 3 month period for a legacy airline without at least a few thousand “decreases” - but, basically there have been none this year

Let me just add, that in general airfares are up on many airlines. That said, I’m not sure why Northwest officials made the statement they did, but according our proprietary historical airfare processing system, the statement is certainly not accurate.

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