Arlington, TX, Thursday, April 17, 2008 - At about 3:30 pm CDT today, Northwest Airlines joined the ranks of American, United, Continental and Delta Airlines in raising fuel surcharges. Surcharges were raised on domestic flights by $10 to $20 roundtrip.
In certain markets the surcharge of $25 one-way will now increase to $35. United Airlines initiated the fuel surcharge increase on Tuesday evening.
This represents the 13th attempt at increasing either airfares or fuel surcharges in the past four months. Eight of these attempts have succeeded, four have failed. On coast-to-coast travel, we have seen airfares climb as much as $170 in this period. "If this airfare hike sticks" - says Parsons, "domestic travelers, who fly between two non-competitive markets will be paying as much as $190 more than they did just four months ago."
"It seems the major legacy airlines are on a whirlwind airfare hike tour. In the past six weeks, one airline or another has attempted to raise domestic airfares. This week we saw a barrel of fuel spike to the $115 level. That $3 increase in a barrel of fuel appears to United Airlines to be justification to raise airfares by up to an additional $20 roundtrip" - says Tom Parsons, Founder and CEO of Bestfares.com. "It's probably becoming cheaper to buy a Hannah Montana ticket than to buy an airline ticket" - adds Parsons.
Last week saw the major airlines successfully raise airfares $10 on routes up to 499 miles, $20 on routes up to 1499 miles, and $30 on routes of 1500 miles, or more. "These airfare hikes have primarily hit the business and leisure travelers in markets where there is no competition from low-cost airlines such as Southwest Airlines, AirTran Airlines, JetBlue, Spirit Airlines, Frontier Airlines and Virgin America" - adds Parsons.
United is also attempting to impose a $5 one-way fuel surcharge on some routes where they are competing with low-cost airlines and did not previously apply a surcharge. "We have seen this sort of airfare increase on competitive routes, especially routes served by Southwest Airlines, attempted many times in the past, but it usually does not stick" - advises Parsons.
"It is becoming crystal clear that leisure and business travelers who are wishing to travel by air in the future are going to have to dig deeper in their pockets" - adds Parsons.
Since December 20, 2007, one or the other of the major airlines have attempted to raise airfares and fuel surcharges 13 different times. Here's a list of airfare and fuel surcharge hikes and attempts:
(1) Week of December 20, 2007: Major airlines raise fuel surcharges on leisure and Business Class fares from $10 roundtrip to $20 roundtrip. Total increase since December 18, 2007, $10 roundtrip.
(2) Week of January 7, 2008: Major airlines raise leisure and Business Class airfares by $10 roundtrip. Fuel surcharges still remain at $20 roundtrip. Total increase since December 18, 2007, $20 roundtrip.
(3) Weekend of January 11, 2008: United Airlines attempts to raise domestic airfares by adding a $30 roundtrip fuel surcharge to domestic airline tickets. Delta, American, Continental, US Airways and Northwest Airlines match. However, on January 14, 2008, Northwest rolled back their $30 fuel surcharge hike forcing the other major airlines, including United, to roll back their fuel surcharge increase. In other words, this attempt to raise airfares (by adding a $30 fuel surcharge) was a bust.
(4) Weekend of January 17, 2008: American Airlines attempts to raise domestic airfares by adding a $20 roundtrip fuel surcharge. Delta, United and Continental quickly match. Northwest Airlines and US Airways decline to match, forcing the other carriers to roll back their fuel surcharge. This attempted airfare fuel surcharge hike is a bust.
(5) Weekend of January 24, 2008: Major airlines double fuel surcharges on leisure and Business Class airfares from $20 to $40 roundtrip. Total increase since December 18, 2007, $40 roundtrip.
(6) Weekend of February 22, 2008: Major airlines raise airfares on both leisure and Business Class airfares $10 roundtrip. $40 fuel surcharge still in place. Total increase since December 18, 2007, $50 roundtrip.
(7) Weekend of February 29, 2008: Major airlines raise leisure and Business Class airfares $10 roundtrip. Total increase since December 18, 2007, $60 roundtrip.
(8) Weekend of March 7, 2008: Major airlines raise fuel surcharges from $40 to $50 roundtrip. Total airfare increase with airfare hikes and fuel surcharges since December 18, 2007, $70 roundtrip.
(9) March 14, 2008: United & Continental Airlines raised both leisure and business domestic airfares by $10 roundtrip on flights up to 500 air miles, $20 on flights 501 to 1000 air miles, $30 on flights 1001 to 1500 air miles, and a whopping $50 roundtrip on domestic flights over 1,500 air miles one-way. On March 15, 2008 American Airlines, Delta Airlines and US Airways matched the new fare hike. March 16, 2008 Northwest, the final hold out of the legacy airlines, matched United Airlines airfare increases. Total increase now as much as $120 roundtrip.
(10) Weekend of March 21, 2008: Delta Airlines raises fuel surcharges by $10 roundtrip. United Airlines was the only major airline to match the new increase. Delta Airlines and United Airlines were both forced to roll back the fuel surcharge increase. This attempted airfare fuel surcharge increase is a bust.
(11) March 27, 2008: Delta airlines raises domestic leisure airfares by adding a $10 fuel surcharge to most domestic airfares. This increase is also a bust when other carriers fail to match.
(12) April 10, 2008: United Airlines raises domestic airfares $10 - $30 in markets where they are not competing with low-cost carriers. All of the legacy carriers match and this one sticks. Total airfare increase now as much as $150.
(13) April 16, 2008: United Airlines raises domestic fuel surcharges by $10 to $20 roundtrip. At 8:00 a.m. CDT on Thursday, April 17, Continental and Delta Airlines match. American Airlines matched two hours after Continental and Delta, followed by Northwest Airlines later that day.
"With US Airways being the last holdout, there's probably a 99% chance that they'll go along with this hike. We'll probably see it happen in the next 24-36 hours and that will make this the 9th fare hire to stick in just four months," says Parsons.
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In certain markets the surcharge of $25 one-way will now increase to $35. United Airlines initiated the fuel surcharge increase on Tuesday evening.
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