January 10, 2011 12:53 PM
FareCompare, the airfare monitoring web site, has reported the third domestic airfare hike in the past month and the first of the year. Domestic airfares have been increased between $4 and $10 roundtrip ($2 and $5 one way) based on flight distance.
FareCompare said that it had detected a relatively minor amount of airfare hike activity in Northern/Midwestern cities this past week which normally wouldn’t have been a significant event until late Friday evening when Southwest Airlines, who rarely initiates an airfare hike, jumped in across most of their routes. Late Saturday evening almost all U.S.
Rick Seaney, CEO of FareCompare, said the company hasn’t seen this pace of domestic airfare hikes since 2007 when fuel prices began to jump dramatically in last quarter and airlines began to institute fuel surcharges (domestic fuel surcharges were removed in November of 2008 as oil prices began to dip from a peak that summer). These recent hikes effect the typically slower travel period of January and February as most airline tickets are sold within 30 days of departure.
While fuel prices have been hovering near recent highs it appears these are hikes are more likely related to continued domestic capacity discipline along with strengthening demand. FareCompare said there is no reason to believe that recent airfare hikes are in any way related to the recent spate of ticket distribution issues between online travel agencies, GDS and legacy carriers during the same time period.
Seaney said he has also seen over the past few months a renewal of domestic peak travel surcharges between $10 and $30 roundtrip for 2011 travel. Peak travel surcharges have been a popular way the past few years for domestic airlines to raise ticket prices on selective high volume time periods around holidays and summer travel in 2009. For more information, visit www.farecompare.com.
