Airlines Hike Up Fares Yet Again, Blaming Higher Fuel Costs

Airlines aren’t just good at lifting planes into the air, but with yet another hike on round-trip fares, they’re showing how great they are at sending prices skyward as well. Zing! This latest increase is the third already this year.

United and Continental kicked off the fare increase by raising prices of round-trip tickets $4 to $10, which spurred Virgin America, Delta Air Lines, US Airways and American Airlines to match their move, says the L.A. Times. JetBlue Airways and Southwest Airlines haven’t followed along as of yet.

This would’ve been the fourth price nudge, except that a previous fare hike initiated by Delta in January wasn’t accepted by the other airlines. That increase was rescinded.

Those in the know in the industry aren’t shocked, as it costs a pretty penny to run an airline and it just keeps getting more expensive. Even though U.S. airlines have cut down on fuel consumption, with the use of more fuel-efficient jets, prices for the fuel they are using skyrocketed by 40% between 2005 and 2011.

Three increases just two months into 2012 should make for an interesting rest of the year, eh?

Airlines raise fares again, point to higher fuel costs [L.A. Times]

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  1. Loias supports harsher punishments against corporations says:

    Many of the airlines contract for fuel at a fixed price for X months. Sometimes they win because costs go up in the time, sometimes they lose if costs go down.

    So really, they aren’t raising prices for their current fuel costs, they are raising them for future fuel costs. Kind of how gas prices are only rising because of potential (and not actual) conflicts in the Middle East.

  2. Cat says:

    “Blaming Higher Fuel Costs”
    I could believe this…
    …except that ticket prices never went down after the last spike in fuel prices.

    Or the one before that, or the one before that, or

    • vastrightwing says:

      I was going to cite this too. If fuel prices had anything to do with it, then as fuel prices go down, so would ticket prices. But just like cell service, the cost of doing business has zero correlation to retail prices. The price goes up as people are willing to pay it. If an airline can’t make a profit from current retail prices, then they get bought up. That’s how it works.

  3. ChaosOnion says:

    Well, I guess it will be another staycation this year.

    • Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

      I love that staycation has entered the popular lexicon. :3

    • Applekid ‚îÄ‚îÄ‚î¨ Ôªø„Éé( „Çú-„Çú„Éé) says:

      I hope you got your international traveling in before peak oil, because air travel will soon be once again only for the wealthy.

      • Cerne says:

        Well taking a vacation sometime in the next 50-100 years shouldn’t be that difficult.

      • ChaosOnion says:

        No, we will have to pick whether to go to Europe or Asia for our international trip. All things considered, we might be able to afford one trip in this lifetime. North America is a pretty interesting continent with many places accessible by road. We can always hit Canada, Mexico or a cruise. Maybe the rail lines will become popular again.

    • Jawaka says:

      Because of $4-$10?

  4. Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

    So when can we have our nuclear-powered aircraft using ion jets? I want my electric airplanes, dammit :C

    • partofme says:

      Never. I recently included a discussion of ion engines amongst various types of propulsion for space vehicles. They’re really cool things. They spit stuff out the back reallllly quickly, which is useful for when you’re not in a fluid medium. The problem even in space applications is mass flow. It’s hard to scale them up to something that will produce much thrust. The NSTAR ion engine maxes out at under 0.1 Newtons. Single jet engines produce about six orders of magnitude more thrust.

      Regardless, it just doesn’t make sense to use a rocket or ion engine when you can just pull on the fluid that you’re flying through. Even if we scale ion engines up to the point where you can produce enough thrust, you’d probably use it on your SSTO spaceship, not a mere airplane.

    • q`Tzal says:

      Evacuated Tube Transport
      a transportation technology operating maglev lines through evacuated (air-less) tubes or tunnels.

      When jet fuel becomes too expensive for anyone other than the military to justify wasting the free market will wake up, after being hit with the ClueBat(tm), to the fact that the airline industry is needlessly wasteful.

  5. AngryK9 says:

    Expect everything to increase significantly in the next 3 to 6 months. Gas prices in the US are expected to increase by a minimum of $1 but likely more more per gallon between now and the Summer peak. Some predictions have prices reaching nearly $5 per gallon in many areas and near or above $6 per gallon in areas such as California and New York which are already over $4 per gallon now.

  6. nbs2 says:

    Makes sense that SW and JB are sitting this hike out – I imagine that their customers are a little more price sensitive than others and SW led the last round.

    For those trying to get up to speed on things, especially since the article was poorly worded and Mary Beth provided her usual useful insight (that’s right, she’s the female Phil):
    Delta (followed by others) – 1/5
    Delta (abandoned) – 1/17
    Southwest (followed) – 2/15
    United/Continental (followed) – 2/22

    I’m curious to see what changes we will see from last year’s 0.3% margin. That they are running on razor margins doesn’t make me more likely to fly, but it does mitigate some of my irritation with them (I’m still canceling my airline affinity CC that I’ve had for 10 years).

  7. Blueskylaw says:

    Thu Jan 19, 2012 3:14pm EST
    (Reuters) – Southwest Airlines Co (LUV.N) reported a quarterly profit that topped estimates as higher airfares helped blunt rising fuel costs, and its shares rose nearly 3 percent on Thursday.
    Service cuts, fare increases and the retirement of less fuel-efficient planes have aided airline profits even as high oil costs and economic uncertainty threaten demand for flying.
    Dallas-based Southwest said its strong passenger revenue momentum was continuing into the current quarter.

    Delta Air Lines (DL) president Ed Bastian said that “the important impact of consolidation” can be seen in US airlines’ financial results, which remain positive despite a difficult operating environment characterized by high fuel prices and shaky consumer confidence.

    “The US industry is on track to generate $2 billion in net profits this year led by Delta Air Lines and United [Continental Holdings],” he said, noting that the DL-Northwest Airlines and United Airlines (UA)-Continental Airlines (CO) mergers have created a “more stable business platform” for the industry. US major airlines posted an aggregate net profit of $1.09 billion in the third quarter.

    Keep Baggage Fees in Check as Airline Profits Soar
    By Regina Lewis
    Posted 4:01PM 06/16/11
    Baggage fees have airlines turning a profit, consumers upset, politicians outraged, airports envious and comedians mocking airline executives for laughing all the way to the bank. Why are we surprised by the fees and what are the best workarounds?

  8. Miriv365 says:

    Did they ever remove the original fuel surcharges from a few years back?

  9. lonestarbl says:

    I look forward to the future article detailing the airlines’ decision to reduce rates as fuel costs decline…

  10. pythonspam says:

    “This would’ve been the fourth price nudge, except that a previous fare hike initiated by Delta in January wasn’t accepted by the other airlines. That increase was rescinded.”

    How is this not considered collusion, or at least anti-competition, between the airlines?
    If Delta only raised its prices because it thought the others would follow suit (and not because the fuel costs really went up), why did it rescind the increase when they did not?

    • nbs2 says:

      Collusion would have required them to form an agreement to raise fares. this was a case of Delta trying to push the market up. Since nobody else raised fares, Delta would have been left with higher fares and lighter loads. Better to lose a $1/seat on a full plane than make $4/seat on a plane with only a few people.

  11. Invader Zim says:

    Well isnt the plane motto “up, up, and away?”

  12. HogwartsProfessor says:

    Yeah, I had a fare for Memorial Day bookmarked recently and when I went back to book it, the price had gone up. Pissed me off. At least now I can’t be surprised at the checkout point by a bunch of fees anymore. I’m liking that new rule.