The eight largest US airlines raise airfares

Airfares have gone up across the board on all major airlines based in the United States. The most significant rise in price occurred with Southwest, the largest discount carrier in the US, where ticket prices increased up to $20 on roundtrip fares for some domestic routes. After Southwest increased its prices, American Airlines, United, Continental, Northwest, US Airways and Delta all followed suit. Of these airlines, Delta was most reluctant to increase tariffs by significant margins, but consumers flying on the other seven carriers will notice the jump in fares.

The fare hikes ultimately boil down to the continued high price of fuel, which is one of the largest expenses for any carrier. Thus far this year, fuel costs have increased, on average, by 24%. This is coupled with relatively high labour costs and this burden is then partially passed on to passengers.

Although increased ticket prices appear to be the trend of the day, two American airlines have thus far kept their prices steady, namely JetBlue and Alaska Air. Air Tran, a discount carrier that focuses on the eastern US, have also raised prices on select routes, but most have remained unchanged for the time being.

The fact that the seven major American carriers have raised their prices in tandem, following the hikes at Southwest is very telling of how airlines do business and how closely they watch their competitors. Whenever an airline lowers fares and offers discounts, competitors are likely to do the same on the effected routes so as not lose any business. Now it is clear that the same appears to be true when one airline decides to increase prices.

www.aa.com