UPDATE 3. – 12-29-10: As of this morning (Dec. 29), the $20 roundtrip airfare hike initiated by American Airlines on Monday has now been matched by United, Continental, Delta, US Airways and Alaska Airlines. Carriers that have so far NOT joined in the airfare hike include AirTran, Frontier, JetBlue and Southwest.

UPDATE 2. – 12-28-10: This afternoon (Dec. 28), US Airways also matched the American-initated airfare hike of Dec. 27.

UPDATE 1. - 12-28-10: This morning (Dec. 28), both United Airlines and Continental Airlines matched Monday’s $20 roundtrip airfare hike initiated by American Airlines. We’ll continue to monitor the 1pm and 8pm feeds to see if US Airways matches. Southwest meanwhile, appears to be sitting this hike out – at least for now.

EARLIER: In the midst of one of the worst travel disruptions of the year that saw thousands of passengers stranded at airports along the Eastern seaboard due to blizzard conditions, airfare prices are on the rise.

New Surcharges: On Monday morning (Dec. 27), both United and Continental added a new $10 one-way “peak travel day” airline surcharge to the majority of their domestic routes ($20 roundtrip). These surcharges have been added to all future travel dates, and are incorporated into the price of the ticket.

Airfare Hike: At midday on Monday (Dec. 27), American Airlines initiated a $20 roundtrip airfare hike for the bulk of its domestic route system; this hike was soon matched by Delta Air Lines. This the second airfare hike launched by American this month.

It’s worth noting that these increases come on a day in which oil prices soared to a 26-month high, which impacts the airlines’ jet fuel costs.

Watch this space; we’ll update as warranted.

Two days ago (Dec. 13), American Airlines initiated a domestic airfare hike of $5 one-way for flights over 500 miles ($10 roundtrip) and a $3 one-way hike for shorter flights ($6 roundtrip); these hikes were added to the bulk of the carrier’s route system.

By the next day, both legacy network airlines and the low cost carriers matched the hike including Alaska, Delta, Frontier, Southwest, United, US Airways and Virgin America – virtually guaranteeing this to be one of the few successful hike attempts of the year.

Domestic airlines have struggled to raise base airfare prices this year, but numerous tries have crumbled due to lack of unanimous participation; and, regardless of the gradually improving economy, airlines continue to live by their recessionary domestic pricing motto of not being a dollar more or less than the competition.

This doesn’t mean that consumers haven’t been paying more for tickets this year.

Domestic airlines have resorted a handful of strategies to lift ticket prices this past year by specifically targeting high demand periods with peak travel surcharges of up to $30 one-way, and by selling fewer discounted seats (yielding up especially this summer) while keeping their planes completely full (maintaining capacity discipline).  These techniques, combined with the continued prominence of airline fees, have been the fuel for recent financial successes.

With oil prices hovering near 2010 highs of $90/barrel and recent positive statements from airline executives regarding winter demand, my prediction is that we will likely see more domestic hike attempts as we head into 2011.