Air fare hikes falter, but demand remains strong
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Major U.S. airlines on Tuesday partially withdrew last week's flurry of fare increases, but one analyst said the fare hikes have been uncommonly successful and suggest robust travel demand this fall.
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A key measure of U.S. airline industry  revenue slipped more than expected in October, pressured by  excess capacity, weak demand and a lingering impact from  hurricanes in Florida, analysts said.
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The holiday season hasn't exactly brought good cheer to air travelers already besieged by near-record-setting flight delays this year.
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A key measure of U.S. airline industry revenue slipped more than expected in October, pressured by excess capacity, weak demand and a lingering impact from hurricanes in Florida, analysts said.
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A $10 fare hike by Southwest Airlines Co, has triggered matching fare increases by rivals as the industry struggles to offset soaring fuel prices and build on a recovery that began last year.
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An increase in passengers has propped up annual earnings for easyJet but the low-cost airline has warned it faces a tough two years as cut-throat competition drives down fares and fuel prices soar.
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Orders for long-lasting US durable goods slipped unexpectedly in August as civilian aircraft demand plunged, but beat forecasts once transportation was stripped out, government data showed on Friday.
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Global air passenger traffic continued a steady rise in the first nine months of this year, rising 17.7 percent from the same period in 2003, the International Air Transport Association said Wednesday.
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Need proof? At a time when US airlines are struggling mightily with few successes in raising fares, carriers like Continental and American are making it cheaper to fly to Latin America.
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A fare increase initiated last week by Delta Air Lines Inc. and matched by rivals remained largely intact on Monday but faltered in some markets due to competitive pressures.
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Southwest Airlines Co., the leading U.S. discount carrier, raised airfares as much as $10 one way over the Thanksgiving Day weekend, a company spokeswoman said on Monday.
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Trans-Atlantic business-class fares are about to become even more complicated as competition grows and demand holds up.
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BIG FARE INCREASES After United Airlines raised domestic fares across the board by $50 a round trip on Friday, most major carriers quickly followed with similar increases on many routes, according to FareCompare.com. The reason was sharply higher fuel costs. Delta Air Lines raised its round-trip fares by $50 immediately after Unitedâs move. American Airlines also posted $50 round-trip increases on 55 percent of its route system, though "conspicuously absent" are increases on its routes that overlap with many Southwest Airlines routes, said Rick Seaney, the chief executive of FareCompare.com. Then on Monday, Northwest Airlines also joined in the $50 increase on most of its routes. Continental Airlines, which initially raised fares by $50 on some routes on Friday, withdrew the increases Monday morning, but Mr. Seaney said it was unclear whether Continental might reverse course again soon. This was the second broad fare increase in 2008, and the 10th since last Labor Day, Mr. Seaney said, adding: "It seems the legacy airlines, United in particular, are forgoing the nickel-and-dime strategy of increases every few weeks and are going for the whole enchilada at one time.".
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A New Age airline is showing there's money to be made despite high energy prices.
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There may be little good cheer for those flying during the December holidays: Many travelers can count on paying 15 to 25 percent more for airplane tickets than they did last year, and that's assuming they can get seats at all.
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Airline fares are at historic lows, but you get what you pay for. Airlines have cut back on food service, started charging passengers to talk to human beings when making reservations, stuffed extra seats onto already-crowded planes and in one instance, done away with in-flight pillows.
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Problems abound for air travel. But there is hope.