Road Warrior

Southwest Raises Airfares, Other Airlines Match

There have been several attempts by airlines to raise airfares during the past few weeks, most failing due to lack of widespread participation. One finally stuck on Friday, with most airlines matching an increase led by Southwest Airlines.

Southwest Airlines passenger planes are seen at Chicago's Midway Airport in Illnois.
Karen Bleier | AFP | Getty Images

Southwest initiated a $10 roundtrip fare increase on Friday to nearly a third of its flights. By the end of the day, American Airlines, Delta Air Lines, United Continental and US Airways matched the increase.

Earlier last week, Deltaattempted to raise last-minute business airfares. When other airlines failed to match the price hike, the airline quickly rolled back the increase.

The current increase by Southwest primarily affects short-haul flights of less than 500 miles in length, which represents about 30 percent of the carrier's flying.

It's becoming more common these days that when a carrier like Southwest launches a fare increase, the major airlines happily follow suit.

"It is rare for any type of hike where Southwest participates to fail — rather the opposite is normally the case as many hikes fail due to their lack of participation," says co-founder and CEO Rick Seaney in a statement.

Veteran industry analyst Henry Harteveldt agrees. In a blog post for Atmosphere Research Group, Harteveldt said, "Air fares tend to be set by the LCCs (low cost carriers) — a group that in addition to Southwest, JetBlue and Virgin America now includes three airlines in the new 'ULCC,' or 'ultra low cost carrier,' category: Spirit, Allegiant and Frontier."

The peak summer air travel period is quickly coming to a close. But with fare increases such as this one, it doesn't appear we'll see a drop in airfares as much as in previous years to compensate for the decline in demand.