Thursday, March 3, 2011

Airlines Hike Rates, Again

AP reports:
Delta Air Lines touched off the latest fare hike by adding up to $20 to the price of domestic round-trip flights for tickets bought on short notice. American Airlines choose a more modest increase of $10 per round trip but applied it to virtually all tickets for travel within the 48 contiguous states.

By midday Thursday, Delta, United, Continental and US Airways had all settled on matching American's $10 increase.
The airline price hikes are likely inspired by climbing oil prices as a result of the turmoil in the Middle East, but the fact that businesses and consumer are willing to pay the higher prices is evidence that businesses and consumer have money in their pockets to pay for the hikes. This sign of cash in the pockets is a further indication of across the board price inflation ahead.

US Airways president Scott Kirby said, according to AP, that travel demand in February remained "exceptionally strong," allowing the company to generate enough revenue to offset higher fuel prices.

"It is pretty clear that demand hasn't softened enough to prevent airlines from testing new highs for base domestic ticket prices," said Rick Seaney, CEO of

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