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Posted on: March 2nd, 2011 by Charlie Mills
Well apparently the latest big fare increase by major United States airlines did not last long. In fact, travelers will be happy to hear that airlines are now rolling back the prices on some of their fares in order to help with struggling demand.
Back on Monday of last week, Delta Air Lines increased its ticket prices to the dismay of many travelers. This, of course, in turn, caused a lot of other major airlines to go along with it, including US Airways. However, last Wednesday US Airways said that they were now having second thoughts about this price increase.
Farecompare.com’s own Rick Seaney said that United and Continental have also chosen to roll back their increases. Other airlines like Delta and American have had little choice but to scale back as well. This is just one increase that did not live up to expectations.
So this brings up the question, what happened? Why did this fare increase fail when so many have worked out perfectly?
The truth of the matter is, fare increases can fail for many reasons. However, the most common is when other airlines refuse to go along with it. Now normally most airlines are more than happy to raise their prices when other airlines do, because it means more money in their pocket. However, if an airline is having a hard time bringing in consumers, then it might not go along with the increase to avoid losing travelers to the higher prices.
That is what experts think happened this time. Some airlines could simply not afford to lose any passengers, and thus, turned down the idea of increasing prices. However, that does not mean that another price increase will not happen in the near feature.