Last night, United Airlines initiated the 16th attempt at hiking airfares in 2008 and this hike was all across the bulk of its route system. The increase ranges from $10 to $60 roundtrip. Also last night, AirTran raised airfares by $50 roundtrip for most flights. And the hikes continue: this morning, American Airlines and Delta Air Lines both matched the United airfare hike across the bulk of their respective route systems. Will more legacy airlines match this latest price hike? To that I respond — do they really have a choice? I would be surprised if we don’t see wide-spread matching over the long holiday weekend. What this means to YOU, and my ANALYSIS coming right up, so keep reading…

There is no doubt that the airline industry (legacy airlines in particular), are in dire straits — and last night, United used one of the three types of arrows remaining in its rapidly emptying quiver to combat $130+ oil: airfare hikes, fee hikes and capacity reductions.

That said, the timing of this increase — on the heels of customer satisfaction survey woes and American Airlines contentious $15 first checked bag fee — is at best a bit tone-deaf, underscoring the desperate measures that are likely to follow if oil prices continue rise unchecked.

I have been asked many times in recent weeks if we have reached the tipping-point on airfare hikes - that point where consumers begin to push back against higher prices (and fees) and passengers head for the exits …

Yes, the signs of softening are there; yes, many people are changing their travel plans; but what strikes me is that it really doesn’t matter — the airlines have no choice but to pass on the cost of fuel to consumers. And, when passengers do begin to push back in significant numbers, the airlines have no choice but to slash capacity by that same amount.

A bright spot for passengers is that airlines have to keep the planes completely full and that means those willing to travel on off-peak days like Tuesday, Wednesday and Saturday and off-peak times of day can still get reasonably priced tickets if they don’t procrastinate and start shopping a few months before departure. Florida, for example, is super-cheap in July because of lingering hurricane jitters and seasonal heat/humidity.

D.C. perspective: I was invited to a “bloggers row” summit at the Department of Transportation last week and got a chance to chat with the Honorable Secretary and several of the top brass and I asked each the following question: “What does $200/barrel oil mean for the traveling public?” The standard response was “halting strategic oil reserve flow” and “closing of the Enron loophole in the farm bill” should bring down oil prices and get things back to “normal”. However, their faces told a more important story: it was clear by their glum looks that things are going to get worse, before they start to get better.

Final note — here is the breakdown on United’s airfare hike:

• City pairs greater than 1,500 miles roundtrip (750 miles one-way) have been increased by $30 or $60
• City pairs between 800 miles and 1,500 miles roundtrip (400 - 750 one-way) have been increased either $20 or $40
• City pairs under 800 miles (400 miles one-way) have been increase $10 or $20 roundtrip