All Major Airlines Raise Airfares Except Northwest Airlines. Is This Fare Hike A Bust?

On Friday March 14, 2008 Continental Airlines was the first major airline to match United Airlines airfare hike. Today American Airlines, Delta Airlines and US Airways also jumped on board. The only holdout of the major airlines NOT to match is United Airlines airfare increase is Northwest Airlines. 

"Northwest Airlines has been the spoiler on airfare increases many times in the past," says Tom Parsons, CEO and Founder of Bestfares.com, an internet travel website that tracks airfare changes and travel industry trends.  "It does not mean that Northwest won’t match these fare hikes tomorrow but as of today Northwest offers the cheapest business and leisure airfares up to $50 less than their competitor. If Northwest elects not to match this aggressive airfare hike by Sunday March 16, 2008, this could force the other five legacy airlines to rapidly descend their new higher airfares," adds Parsons. 

If there is any good news for travelers, America now has many routes served by the low cost carriers.  Due to the competitive nature of the airline industry in most instances, the major airlines are forced to offer lower competitive airfares on these routes.  "When comparing airfares in nearby competitive markets that are serviced by low cost carriers and comparing nearby alternative airports to non competitive markets some airfares can be better than half price," states Parsons.  For example, Dallas to Key West, Florida is selling for $636 roundtrip.  This is a route with no low-fare airline competitors.  Fly from Dallas to Miami, a market where there are low-fare airlines, and the airfare drops to $238 roundtrip.  That’s almost a $400 difference.  A family of four would save almost $1600 for a 125 mile ride by car.  Forget the car, for that kind of savings get me a limo.

It should also be noted that since December 18, 2007, the major airlines had already successfully raised both leisure and business airfares by $70 roundtrip by either raising airfares or fuel surcharges. If this increase is matched by American, Delta, Northwest and US Airways, travelers flying over 1,500 airmiles on non-competitive routes will be paying as much as $120 roundtrip more on the same routes in less than three short months. Listed below are the airfare hikes and fuel surcharge increases the major airlines have made since December 18, 2007. 

(1) Week of December 20, 2007:  Major airlines raise fuel surcharges on leisure and Business Class fares from $10 roundtrip to $20 roundtrip.  Total increase since December 18, 2007, $10 roundtrip.     

(2) Week of January 7, 2008:  Major airlines raise leisure and Business Class airfares by $10 roundtrip.  Fuel surcharges still remain at $20 roundtrip.  Total increase since December 18, 2007, $20 roundtrip.

(3) Weekend of January 24, 2008:  Major airlines double fuel surcharges on leisure and Business Class airfares from $20 to $40 roundtrip.  Total increase since December 18, 2007, $40 roundtrip.

(4) Weekend of February 22, 2008:  Major airlines raise airfares on both leisure and Business Class airfares $10 roundtrip.  $40 fuel surcharge still in place.  Total increase since December 18, 2007, $50 roundtrip.

(5) Weekend of February 29, 2008:  Major airlines raise leisure and Business Class airfares $10 roundtrip.  Total increase since December 18, 2007, $60 roundtrip.

(6) Weekend of March 7, 2008:  Major airlines raise fuel surcharges from $40 to $50 roundtrip.  Total airfare increase with airfare hikes and fuel surcharges since December 18, 2007, $70 roundtrip. 

(7) March 14, 2008: United & Continental Airlines raised both leisure and business domestic airfares by $10 roundtrip on flights up to 500 air miles, $20 on flights 501 to 1000 air miles, $30 on flights 1001 to 1500 air miles, and a whopping $50 roundtrip on domestic flights over 1,500 air miles one-way.  On March 15, 2008 American Airlines, Delta Airlines and US Airways matched the new fare hike.

"Now that the price of crude oil has gone as high as $111 per barrel this week, we do expect the airlines to pass this higher fuel cost on to the traveling public," states Parsons. "If there is any fact here, air travelers will be paying much more than they did last summer, especially in markets where the legacy airlines do not have to compete with low-cost carriers such as Southwest Airlines, JetBlue, Spirit, Virgin America and Frontier." 

As fuel prices continue to rise, non-competitive markets will continue to take the brunt of future airfare and fuel surcharge hikes.  The biggest opportunities for low-cost travel are to those travelers who have the option of flying on low cost carriers, or on those routes where the legacy carriers have to match those fares to remain competitive. Those travelers still have the "Freedom To Fly" for less, for example, coast to coast for as little as $198 roundtrip. 

"For those who are planning travel for the upcoming busy summer travel season, the airlines are going to have to keep addressing the reality of higher and higher fuel prices and the general public is going to have to face the fact that they are going to have to spend more if they want to continue to travel by air,” adds Parsons.  Parsons also strongly suggests that if you are planning to travel between the busy summer period June through Labor Day you better start searching now and not later.     

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