Sky high airfare is here (to stay?)
Following recent increases in fuel surcharges by the airlines, Continental Airlines and United Airlines have announced that they're increasing fares immediately. The increases are expected to be up to $50 on round trip fares. The longer the flight, the greater the increase.
The price increased is blamed on airline fuel, which is at record high prices. Many of the airlines have been increasing their fuel surcharges as well, so the increase in the cost of air travel continues to rise. This will be the fourth week in a row that price increases have been announced by airlines.
Obviously, this price increase will hurt the frequent travelers (primarily business people) and families (buying multiple tickets at once) more. The price increases aren't really unexpected, as consumers have seen the prices of many things increase lately, including food, gas, and many consumer goods.
Typically, the rest of the airlines will do similar increases when something like this is announced, so consumers should be prepared for the possibility of paying more all around for airline travel. The one thing consumers have on their side is the presence of low-cost carriers like Southwest Airlines and JetBlue Airways. Those companies compete by offering low prices. When the other carriers try to hike prices, the discount carriers often see more customers, and the big carriers are sometimes forced to roll back their price increases.
Should you wait and see about booking airfare for upcoming trips? Who knows. The airlines might roll back the prices and then you'll be lucky. Or the exact opposite could happen and you could end up paying more for your flights booked a few weeks from now.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.