Most Airlines Hike Airfares

October 20 00:00 2011

New York, October 20 ( – Initiated by Delta Air Lines Inc. late Tuesday when it hiked its fares by $4 to $10 on round trip flights across most of its U.S. routes, the trend has major airlines following suit immediately. This is the first widespread airfare increase since early August. United Continental Holdings Inc. matched the increases immediately after Delta’s move. By early Wednesday, most airlines had raised fares.

This is the 19th attempt by airlines to increase fares this year but only half of their attempts have succeeded but they have brought up the average fares by $58 to $70. The current fare hikes have been announced as third-quarter financial results started to be announced by the airlines. Airline investors find a positive signal of a strong demand in higher ticket prices although they annoy travelers.

Baker of JPMorgan feels that the speed with which all major airlines have endorsed the latest fare hike in less than 24 hours and its success are indications that airlines are more optimistic about demand through the end of the year.

Despite the announcement of higher fares, American Airlines parent AMR Corp reported on Wednesday that it lost $162 million in the third quarter for the fourth straight losing quarter, blaming fuel costs.