Fare hikes: Airlines will keep trying
American Airlines led a charge over the weekend to raise domestic air fares in the USA. It held for a while, as United Airlines, Delta Air Lines, Continental Airlines and others quickly matched American’s fare hike.
Then it fell apart when Continental, citing the need to hone a competitive edge, dropped out on Monday, and other major U.S. legacy airlines — American included — rolled back their fare hikes, too.
That’s a good thing, right?
Well last week the yearly meeting of the International Air Transport Association, the global airline trade group, met in Istanbul — and a more depressed group of people would be hard to find anywhere. Thanks mainly to sky-high fuel prices, IATA predicts the world’s airlines will lose $2.3 billion this year — that’s if a barrel of crude oil averages $107 for the year. If oil averages $135, the world’s airlines will bleed $6.1 billion in 2008. U.S. carriers, already burdened by debt, aging fleets and disgruntled employees, will account for much of this red ink.
If you have to fly somewhere book it today. This may help you avoid higher fares later when the airlines try to hike the price of a ticket again. And they will try. They have to.
via msnbc.com
