GO
Loading...

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 Airlines
Bloomberg via Getty Images
Delta Airlines

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.

Travel

  • A Bombardier Learjet aircraft

    Considering a jaunt to the Hamptons or Martha's Vineyard for the long holiday weekend? You may want to make other plans.

  • The Australian airline unveiled the deepest loss in its history, but its shares surged after the carrier says it expects to return to profit in the current fiscal first-half.

  • After American Airlines severed ties with Orbitz over a pricing dispute, Daniel Kurnos, Benchmark Company senior analyst, and Mike Miller, Miller Air Group president, discuss if airlines are being held hostage by travel companies.

U.S. News