Airlines Stay Competitive by Increasing Fares

Thursday, November 5th, 2009

In addition to raising ticket prices by as much as $10 for certain dates of travel during the holiday season, major airlines are staying competitive by matching another slew of fare hikes. According to travel web site FareCompare.com, United Airlines and US Airways had both increased their fares to match those of competitors Delta, American and Continental.
 
Experts report that this was the fifth increase in ticket prices by U.S. airlines this year, but low-cost carriers such as Southwest and AirTran will not be joining the major carriers with a price increase, but are offering lower-priced fares and hosting fare sales instead.

Airlines have continued to struggle with recovering revenues in light of the recession in the past few months, and although experts are saying that the recession may indeed be over, airlines and other industries will need to wait several months - even years - to get ahead of the lossed profits.

Raising fares is one way to generate immediate revenue, and many airlines have also added or increased baggage fees, tacked on extra service fees, and found other ways to generate more revenue per passenger.

In order for the major airlines to stay competitive, they must meet the prices of their competitors on a regular basis. This can mean price hikes that take place as often as two weeks apart during any given month. 

For the remainder of 2009, travelers can expect a steady increase in fare prices, especially over the holiday season.