
Late Wednesday, United Airlines initiated a relatively small system-wide domestic airfare hike:
- $4 roundtrip (for flights under 1,000 miles)
- $8 roundtrip (for longer flights)
This hike is included on United’s routes that overlap those of the low-cost airlines.
The remaining four legacy airlines (American, Continental, Delta and US Airways) matched on Thursday – but there was a notable lack of participation by the major low-cost carriers (Southwest, JetBlue, and AirTran).
So far this year, there have been a handful of system wide domestic airfare hike attempts – and typically they have amounted to relatively small increases, certainly compared to hikes during the years 2005 to 2008.
We ran a quick analysis comparing domestic prices points from Jan. 1, 2010 to the end-of-day on Thursday, April 1, 2010 and it showed that airlines have had a tough time hiking fares, system-wide, – with the only “over-$20″ roundtrip hikes occurring on trans-border Canadian routes.
However, domestic airlines have increased pricing power through the use of “peak travel day surcharges”, plus by holding fewer and more-restricted sales, as well as controlled departure date windows, bag fee increases and tighter yield management controls. Additionally, airlines that fly internationally have been able to keep price points 30 to 50% higher than last year at this same time.
Advice to Airfare Shoppers: At the moment travelers shopping for domestic departures after mid-June are experiencing sticker shock – and should wait a few weeks until airlines begin rolling out deeper summer sales.