Delta Reverses Course on Fare Hike Plan
Delta Air Lines has dropped a fare increase of up to $10 per round trip that was most likely to hit business travelers.
Delta said Wednesday that it began rolling back the increase after competitors declined to match it. Airlines hate to have the highest fares because some consumers will change plans to save even a few dollars.
Airlines have tried raising fares eight times this year but only succeeded four times, including the most recent increase in July, according to J.P. Morgan analyst Jamie Baker.
On Monday night, Delta Air Lines raised prices on many tickets sold within seven days of departure by $4 to $10 per round trip. The increase included seats in first class, instant-upgrade and refundable economy-class fares. Those tickets are often bought by business travelers; vacationers prefer to get lower fares by buying seats further in advance.
Baker said Delta and United Airlines "are clearly interested in higher fares" but that Southwest may want to wait until after Labor Day to raise prices. United's parent company is United Continental Holdings.
Southwest Airlines spokesman Paul Flaningan said the airline had no immediate plans to impose a system-wide price increase. Southwest executives have often been more cautious than their peers about travel demand in the face of a weak economy.
Southwest carries more U.S. passengers than any airline, and it has great influence over prices on many routes. This week, instead of matching Delta's increase, Southwest launched a new fare sale.