Major Airlines Try Another Fare Increase

Posted Dec 29th 2010 11:30 AMUpdated Dec 29th 2010 01:18 PM

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American Airlines has raised airfares for domestic flights by $20 roundtrip, just two weeks after it successfully initiated a $10 roundtrip hike.

So far, Continental, Delta, United and US Airways have matched the latest increase, according to FareCompare, a company that monitors airfares.

But AirTran, Frontier, JetBlue and Southwest are still holding out.

In the past, American has not applied fare increases on routes where it competes with Southwest.

But this time, it appears the carrier has not backed off those routes -- American may be emboldened by the fact that Southwest matched its Dec. 15 increase.

If AirTran, Frontier, JetBlue and Southwest don't match the latest increase, the traditional airlines can either apply the increase selectively, avoiding routes on which they compete with those rivals, or abandon the increase altogether.

Why a second increase in a month? Airlines are acting in an environment of highly volatile fuel prices.

The Associated Press reports that several large investment banks predict that oil will hit $100 next year as China, India and other emerging economies compete with developed countries and tighten the world's oil supply.

Filed Under: News

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