HOTELMARKETING.COM

Airlines regaining pricing power

November 19, 2009 | Online Travel

Airlines in recent months have regained some of the pricing power they've lost in the past year, as airfares inched upward from their lowest point in a decade toward what travel management companies predict will be even higher levels in 2010.

“There’s no doubt that prices are firming,” said Rick Seaney, CEO of airfare tracking firm FareCompare. “Basically, what we saw was an absolute freefall in prices from November through May—both domestic and international. Beginning in June, we had our first domestic airfare hike of the year. For some context, there were 15 hikes in 2008 and 17 hikes in 2007. We had a very steep bottom at the end of May and sort of a firming over the three or four months.”

In an alert issued late last month, FareCompare said carriers attempted three fare hikes in as many weeks to close out October. The last of those, a modest $6 to $10 roundtrip increase initiated by AirTran, was matched on overlapping routes by American, Delta, United and US Airways, and not only matched by Continental, but expanded. That was the sixth successful fare hike of 2009, all of which have occurred since June.

Get the full story at BTNonline

Visit our sponsors: