ContiUnited Airlines has decided to add a “peak travel” surcharge adding $10 to each segment of a ticket and American Airlines raised the ante by raising fares about $22 which Delta Airlines matched.

Higher oil prices which lead to higher fuel prices is leading to this drive to earn more most likely.  However, it’s notable who is leading this rise in air fares.  It’s the SuperLegacy airlines and this points out just how much pricing power these folks potentially have. 

It’s unlikely that the LCC carriers will exploit these air fare increases immediately.  Everyone in this business needs to recover and rebuild their war chest.  Some have quite a bit on their plates already (Hello Southwest) and some are just battered from a few bad years (Hello jetBlue). 

I still think we’ll see serious fuel charges in the future and especially on international flights.  But all this potential for profit is going to do something else:  attract new entrants to the business.  And there are plenty of opportunities to compete against high fare SuperLegacy and Legacy airlines.  If these profits (via air fare increases) hang around for the next 6 to 12 months, I do think we’ll see someone announce the start of a new airline. 

In the meantime, the smart traveler will book early and book off-peak flights.

Filed under: Airline News by ajax
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