Over this long, holiday weekend, we’ve seen a rollback of the attempted $10 roundtrip airfare hike initiated by United Airlines last week.
Yes, all the legacy carriers matched going into the weekend – but then the system-wide increase began to fizzle with most of the legacy airlines essentially rolling back to pre-hike pricing as of lunchtime today (and it now appears that all will do so).
This modest hike was the second to fail this year – out of two attempts.
An update on my earlier story about the second airfare hike of the year:
Today, Continental and Delta matched the modest hike initiated by United (which US Airways and American began matching on Thursday). This hike is $10 roundtrip.
So now, all five legacy airlines – plus Alaska – have joined the hike. The low-cost carriers, however, have not participated.
I’ll update as warranted.
Late Wednesday (Feb. 10), FareCompare.com’s proprietary airfare tracking system noted significant airfare increase activity, initiated by United Airlines.
United hiked domestic U.S. airfares by a modest $10 roundtrip ($5 one-way) on over 15,000 routes – and both US Airways and American began matching on Thursday.
I would not be surprised to see both Delta and Continental match within the next 24 hours, given their efforts a few weeks ago in the first airfare hike attempt of 2010 (the attempt was a failure).
As in most legacy carrier airfare hikes, sale and competitive low cost airline route overlap fares have been spared the increase.
In addition to the domestic hike attempt Wednesday evening, we have noted over the past week airfare increase activity on a smaller number of routes based on trip distance — Southwest has matched this hike on competitive overlap.
Note: Amidst the domestic airfare increase activity the past 7 days, Southwest launched a widely matched 3 day airfare sale (ends Feb. 11) for late winter and spring departures — underscoring the fact that domestic U.S. ticket price firmness still requires a dose of discounting to fill aircraft to capacity.
In the meantime, legacy airlines continue to use the relatively new technique of peak travel day surcharges (filed in the same manner as fuel surcharges) to generate additional revenue on the most popular dates of travel.
As for this latest airfare hike attempt, we will send out an update if it falters in the next 48-hours.
Glad you asked.
Peak travel day surcharges are a way for airlines to raise money in a tough economic environment and they’re kind of ingenious in their simplicity.
First you have to understand that over the last year airline ticket prices were in free fall to historic lows, and the airlines haven’t had much luck raising airfares en masse – we leisure travelers quit buying and business travelers aren’t picking up the slack. Sure, bag fees are perking along, and they may bring in close to $2 billion this year, but it’s just not enough.
Face it, the airlines are hurting.
So if they can’t boost the price of all tickets, the airlines will settle for boosting the price of a lot of tickets – with surcharges. Trust me, the airlines have been studying our habits for years – they know which days we want to fly, so they release fewer cheap seats and now are slapping on targeted departure day surcharges on these most popular days to fly (or “peak travel days”) and this allows them to rake in an extra $20 to $60 per roundtrip ticket.
Here’s something you may not know: peak travel day surcharges are filed in the same fashion as fuel surcharges which were popular in 2008 when oil hit $140+ per barrel – and both are rolled into the price of your ticket and are baked into the quoted price. These are not charged separately like bag fees – which are an “extra” item, like trip insurance – something you choose to pay. There’s no choice involved with a surcharge – if you fly on a “surcharge day” you will pay the price.
Why should you care? Because peak travel days belong on any list of “most painful days to fly”. Keep reading, I’ll explain…
“So What Exactly ARE These ‘Peak Travel Day’ Surcharges, and Why Should I Care?”
UPDATE: Continental has added surcharge dates; Alaska is matching on their AA/DL codeshare flights only.
Last night, United Airlines added a bunch of “peak travel day” surcharges onto dates through the summer vacation season in June, July and August; these latest surcharges are $10 each-way.
Earlier (on Monday), Delta added new dates , and American joined on Tuesday. Note: Unlike a bag fee, the surcharge is not presented to the airfare purchaser as an “extra” cost; it is rolled into the price of the ticket.
To make it easy for everyone to see the precise dates – and costs – of all these surcharges, I’ve put together a Peak Travel Day Surcharge Calendar – and the calendar includes all months from February through August.
Take a look as you plot your escape to your next getaway with cheap flights from FareCompare -avoid the “surcharge” days and save yourself a buck or two.
UPDATE: Alaska is matching on their AA/DL codeshare flights only.
Summer vacation travel is the latest target of those relatively new “peak travel day” surcharges – surcharges that were originally given the nickname “holiday surcharges” since they were initiated on popular Thanksgiving and Christmas travel days.
Delta Airlines and American Airlines are extending surcharge days into the summer.
The carriers have added numerous dates in June, July, and August. According to American spokesman Tim Smith, these surcharges apply to dates “we believe will be among the busiest during the summer travel season”.
Clearly, all airlines are looking to make some money – I can also point out that American and other legacy carriers ultimately withdrew from last week’s first attempted airfare hike of the year, but American’s Smith said that the filing of the surcharges had “nothing to do” with the earlier airfare hike attempt.
See FareCompare’s Calendar Table for all the surcharge dates, airlines and prices.
We can now declare the first domestic airfare hike of 2010 – a hike initiated by American Airlines on Tues., Jan. 19 – a failed attempt.
Yesterday, we saw Delta/Northwest pull out of the hike, and today that airline was followed by American, United and Continental.
The hike, which was from $6 to $16 roundtrip, originally covered the bulk of American’s domestic route system, affecting some 9,000 city-pairs.
Two carriers are still in on the hike – Alaska Airlines and US Airways – but probably not for long. US Airways was the last to join the hike on Saturday, and it did not match the hike in as many markets as the others.
Here’s the latest: United has now matched that first airfare hike of the year, leaving only US Airways as the lone legacy carrier holdout.
Historically, US Airways has been one of the last to match on airfare hike attempts (within a 3 day period), and frankly it’s a little odd to see them still on the fence since all the others (Alaska, American, Continental, Delta/Northwest, and now United) have all jumped in.
In the past, airfare hike attempts usually fizzled when there was a lone holdout, but it appears with “right-size” domestic capacity and positive demand trends, this may not be the case.
However, it would not surprise me to see US Airways join in the hike over the weekend. I’ll keep you posted…
