Saturday, February 18, 2012

Southwest hikes fares by $10, other carriers follow

By Rob Lovitt, msnbc.com contributor

Updated Feb. 16, 2:15 p.m. ET --?As of 10 a.m. ET on Thursday, all major U.S. airlines -- legacy and low-cost -- matched the $10 roundtrip price hike, Rick Seaney said in an e-mail.

Published Feb. 15 --?If airfares suddenly seem higher, look no further than Southwest Airlines, which, according to Rick Seaney, CEO of FareCompare.com, initiated a fare hike of $10 roundtrip ($5 one-way) early Wednesday. If history repeats itself, other airlines are likely to follow suit.

The move represents the third attempted fare hike of the year, coming on the heels of two in January. Both of those were led by Delta Air Lines, but only the first one was matched by the competition.

This time around, Seaney expects other airlines to match Southwest?s increase within hours, noting that in the last six years, there hasn?t been a single Southwest-initiated hike that went unmatched.

?I?d expect the other airlines to follow quickly,? he told msnbc.com. ?It?s like what we in Texas call ducks on a June bug.?

Even so, he doesn?t foresee a drastic run-up in airfares: ?The airlines had a difficult time raising fares last year ? less than half went through ? and it may be as hard or harder this year.?

Given the price of oil ? $101 per barrel this week, up nearly 20 percent from this time last year ? there?s little doubt that the airlines would like to raise fares. However, with consumers feeling a similar pinch, any increases will likely be countered by decreasing demand.

?I don?t get a sense that consumers feel like their wallets are any fatter than they were last year,? said Seaney. ?Airlines have to fill every empty middle seat and the folks who?d be sitting in those seats are among the most price-sensitive.?

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Rob Lovitt is a longtime travel writer who still believes the journey is as important as the destination. Follow him at Twitter.

Source: http://overheadbin.msnbc.msn.com/_news/2012/02/15/10418425-southwest-raises-fares-others-expected-to-follow

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