Some airlines may be fighting back against reports of lower domestic fares for summer travel. Delta and American each raised fares for most domestic routes by $5 each way on Friday. So far, other airlines have not matched, though Northwest and United have said they are studying Delta’s increase before announcing higher fares of their own.
Fare hikes are often rolled back if other airlines fail to match them, but a Reuters report suggests increasing fuel costs will make this one different. In the report, JPMorgan analyst Jamie Baker
says, “Given the continued rise in jet kero prices, we ascribe a greater-than-usual probability of competitive matching.”
If the $5 increase sticks, it won’t apply to all domestic routes, particularly ones where Delta and American face competition from low-fare carriers such as Southwest. Low-fare airlines generally prefer to initiate their own fare increases rather than match those from other airlines.
Whether this fare hike sticks or not remains to be seen, but you can bet airlines will try raising fares many more times this summer.
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