Latest Attempt at Airline Fare Hike Slipping Away
The nation's 9th attempted airfare hike began to unravel as United Continental Holdings, which launched the increase, rolled back the fares in markets where it faced competition from rival Southwest Airlines.
David McNew/Getty Images
United Continental launched a $10 increase on domestic fares late Thursday, which was matched on Friday by rival carriers American Airlines, Delta Air Lines, JetBlue Airways, US Airways and Alaska Airlines.
However when Dallas-based Southwest Airlines failed to match by Sunday, United Continental rolled its fares back on competing routes and American pulled back fares on 5% of routes where they previously matched.
"It's rare when you start to see these rollbacks and they don't just falter, but you never know what they are going to do," said Rick Seaney, founder and chief executive at FareCompare.com.
The airlines have attempted to raise fares nine times since the beginning of the year as oil prices have increased. The fare increases accelerated as political turmoil in the Middle East turned into a virtual civil war in Libya, which produces 2% of the world's oil supply.
However, the March 9 fare increase by American and the March 21 fare hike by United Continental failed as some rival carriers declined to join fare increases by the major hub-and-spoke carriers.
Several carriers, including Delta, United Continental and American have announced plans to reduce capacity growth as a cost saving measure, while airlines like JetBlue have announced increased fees for ancillary services.
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