United, Delta and American Airlines announced their latest USD10 hike on round-trip fares has failed as LCC giant Southwest Airlines did not follow suit (AP/Wall Street Journal, 06-Apr-2011). On 05-Apr-2011, the increase collapsed at the same time AirTran and Frontier put a limited number of seats for summer travel on sale. The average ticket price for a US domestic economy seat sold on Expedia has been up 6% to 17% weekly in 2011 compared with the same weeks in 2010. Services from LaGuardia to O’Hare cost 27% more in Mar-2011 on average. Tickets sold for LA-New York were 21% more expensive than in 2010.
United, Delta and American Airlines fare increase fails
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Delta and Southwest have both publicly cited a bump in demand since the US presidential election in Nov-2016. Delta has expressed cautious optimism that the US revenue environment has turned a corner, and the positive momentum is driving the company’s confidence of climbing out of a negative unit revenue performance in 1Q2017.
Key to sustaining unit revenue momentum is keeping capacity in check over the course of 2017. American, Delta, United and Southwest have all declared their intentions to lower capacity growth in 2017, and show no intentions of revising those targets upwards. Rising fuel cost and non fuel cost inflation are the major headwinds for US airlines in 2017, which has resulted in Delta declaring margin compression for the year.