United Airlines (NYSE:
) attempted to raise airfares for the second time in two weeks last
Thursday but Monday, the airline company abandoned its attempts to
raise fares because of a lack of demand. Rising jet fuel prices are
the cause of airlines' continued attempts to increase airfares and
other types of fees.
The New York Times
, when United Airlines raised its fares other airlines such as
American Airlines and Delta Air Lines (NYSE:
) followed suit. Once United Airlines backed off, so did the other
airlines. Although this attempt was unsuccessful, passengers can
prepare for more efforts from the airlines to raise fares.
According to FareCompare, which tracks fare increases, once one
airline hiked fares $4 to $10 per round trip many other airlines
followed. This is the fifth fare increase attempt in 2012, most of
which have been abandoned. Often, if other airlines do not follow
suit in the increase of fares, the airlines will withdraw the
Founder of FareCompare Rick Seaney wrote, "With so much 'up in
the air' as they say, it is pretty clear airlines will continue to
try to recoup fuel increases with regular attempts at airfare hikes
this year - and it will be up to passengers to tell the carriers
exactly when the price of a middle seat on a packed plane has
finally stepped over the line."
Along with increases in fare prices through the year, the Bureau
of Transportation Statistics stated that the domestic airlines
collected more than $815 million in baggage fees during the months
of January, February and March of 2012, compared to just $792
million in the fourth quarter of 2011. Despite the increase in
baggage fees, airline traffic experienced a 4 percent decrease in
the same period.
One reason for the increases in fares is the spike in jet fuel
that the US has experienced so far in 2012. The price of jet fuel
has jumped 7 percent this year already. In 2011, jet fuel prices
increased by more than 30 percent for airlines in comparison to the
year before. Seaney notes that if oil prices remain high throughout
summer he expects that fare prices will be raised even more.
Rising oil prices and a weak economic outlook have left airlines
looking for the right combination of price and supply. Many
airlines have experienced decreases in trans-Atlantic capacity.
Delta Airlines suffered a 7.6 percent decrease in trans-Atlantic
customers specifically. With increasing fuel prices but decreasing
demand, airlines may reduce the supply of seats available.
Rick Sweaney gives some tips in order to find rare summer
airfare deals, including looking for airfare sales that begin on
Monday, unlike the traditional airfare sales that begin on Tuesday.
Another is to look for atypical sales offered by airlines, such as
Virgin Airlines' offering of eight-hour only deals recently.
Another piece of advice he gives is to use sites that compare fares
from different airlines.
Despite the increased fares throughout the years, travelers can
now feel safer with airlines handling their bags. Due to advances
in technology, airlines have experienced the lowest number of
mishandled bags since 2005.
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