Airlines roll back fare hike ... sort of


On Monday, June 9, Continental, American, Delta, and United rolled back the $20 fare hike implemented during the weekend. Northwest, which was the last airline to match the hike, and US Airways have yet to recall their $20 increase. This is only the fifth time this year (out of 17 attempts) that a fare hike hasn't been successful across-the-board.

Good news! Right?

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Mostly, but this is where it gets interesting. Within hours of the recall, United sent forth a new $20 fare increase. If this doesn't seem like a logical move to you, you're not alone, but a closer look at the details reveals some shrewd maneuvering on United's part.

According to FareCompare.com CTO Graeme Wallace, this fare hike carefully avoids routes served by low-cost carriers, particularly Southwest, as well as major hub cities such as New York, Chicago, and Houston. One can deduce, then, that United's hike is aimed squarely at routes where competition is minimal and profits are low, namely service to secondary hubs and small, out-of-the-way airports.

Well, leave it to United to kill a good buzz. But despite United's new fare increase, there is hope to be found for passengers tired of rising prices. The fact that this wide-ranging $20 increase didn't stick could be seen as the airlines admitting that prices, and passengers' wallets, are nearly maxed out. Yes, United is now trying to stick it to less-popular routes, but if the airlines are afraid that pushing airfares further upward could mean empty planes on major routes, we may be looking at a reprieve.

That's all speculation, of course, but I like to end on an optimistic note. So let's keep our chins up—until the next fare hike, anyway.

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