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U.s. Airlines Raise Fares Twice In Two Weeks

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http://www.guardian.co.uk/business/feedarticle/8576512

U.S. airlines raised fares for a second time in two weeks, a strong signal that the industry is nearing a bottom on ticket prices, according to FareCompare.com, a site that compares prices for flights.

AMR Corp's American Airlines hiked prices between $5 and $10 for a one-way ticket for a large number of its U.S. routes on Wednesday. Later that day, UAL Corp's United Airlines matched those increases on many of its own U.S. flights.

The increases are an attempt by airlines to lift prices ahead of a key summer season, typically a strong period for the airline industry, said Rick Seaney, chief executive of FareCompare.com.

"Until about three or four weeks ago, you saw almost continuous airfare sales," said Seaney. "Now the sales we do see are Tuesday, Wednesday, Saturday sales, off-peak sales instead of discount."

The increases also suggest some business travel is coming back, a welcome change for the airline industry, Seaney added. Fares have suffered sharply this year due in part to fewer travelers paying for business-class seats, which cost between 2.5 to 3 times more than a coach-class ticket.

"If there is another (fare hike) in a couple of weeks, we'll know for sure," Seaney said.

Sluggish consumer and corporate spending has forced airlines to drop fares to stimulate demand. The industry has also been hurt by oil prices, which have doubled since early February.

Still, in recent weeks, the pace of discounting has slowed and there are signs of stabilization. Major legacy carriers and low-cost carrier Southwest Airlines boosted fares on U.S. flights two weeks ago for the first time this year.

On Thursday, data from the International Air Transport Association showed May passenger traffic slumped 9.3 percent. The improvement appeared to show the decline in traffic was leveling off, although not improving.

"We may have hit a bottom, but we are a long way from recovery," said Giovanni Bisignani, IATA's CEO, in a statement.

It's the recovery.

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http://www.guardian.co.uk/business/2009/ju...as-demand-falls

Airline passengers are benefiting from a slump in demand after the latest industry data indicated that carriers are having to slash fares to fill their planes.

Industry revenues have registered their steepest decline since the recession began, according to the International Air Transport Association (Iata), falling by an estimated 30% in May. Passenger numbers appear to have reached a plateau, Iata added, with a fall of 9% indicating that the declines in bookings are not getting progressively worse month-on-month.

However, Iata's chief economist, Brian Pearce, said the passenger numbers could be stabilising because yields – the average revenue per passenger and a proxy for fares – are staying so low. "It might be that we are getting a stabilisation in passenger numbers because air travel is so cheap," he said.

Fares are being driven down because the amount of seats available still exceeds the number of willing buyers by some distance. Airlines flew with 5% fewer seats by reducing flight schedules in May, but that was nearly half the decline in passenger numbers.

"The cuts in capacity that we have seen are still much smaller where we are today in passenger numbers, which is why we have seen fares and yields come down so sharply. The rational thing would be for the industry to re-size itself and get smaller," Pearce said. The Iata economist added that he was "sure yields will stay low" until seat availability and demand are more evenly matched.

Iata did not release yield figures for May, but initial figures from US carriers show that prices are tumbling rapidly. Yields for transatlantic routes – a vital profit source for British Airways and Virgin Atlantic – fell by nearly 24% in May, according to figures issued by US airlines.

BA is locked in negotiations with trade unions about securing pay cuts from its 40,000-strong workforce after its chief executive, Willie Walsh, warned that the airline is in a "fight for survival". The airline is expected to announce how many staff have responded to its request for unpaid leave and unpaid work by the end of this week. The request to work for no pay, following the example set by Walsh who has waived his July salary, was rejected by trade union leaders.

And then we have this article. :blink::unsure:

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U.s. Airlines Raise Fares Twice In Two Weeks, A signal the industy has hit bottom?

No it's a signal that oil prices have been rising.

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U.s. Airlines Raise Fares Twice In Two Weeks, A signal the industy has hit bottom?

No it's a signal that oil prices have been rising.

Err no - it's the peak season

Also probably less people travelling

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Guest Parry

Same as the Baltic Dry Index, excess capacity has been removed from service. Expect prices to rise.

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U.s. Airlines Raise Fares Twice In Two Weeks, A signal the industy has hit bottom?

No it's a signal that oil prices have been rising.

Or possibly oil futures, airlines tend to hedge a lot of their fuel.

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Guest Parry
baltic dry has gone up because all the ships are sat off shore waiting for prices to go up before they unload

Right. Excess capacity has been removed from the system.

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That's O'Leary's secret. That and not paying taxes.

I really like Michael O'Leary,he is my favourite businessman by miles. Here are a few choice quotes...

We need a recession. We have had 10 years of growth. A recession gets rid of crappy loss-making airlines and it means we can buy aircraft more cheaply.
We want to annoy the ******* whenever we can. The best thing we can do with environmentalists is shoot them. These headbangers want to make air travel the preserve of the rich. They are Luddites marching us back to the 18th century.
I don't give a shite if nobody likes me. I am not a cloud bunny, I am not an aerosexual. I don't like aeroplanes. I never wanted to be a pilot like those other platoons of goons who populate the air industry.
The problem with the airline business is it is mostly run by a bunch of spinless nincompoops who acually don't want to stand up to the environmentalists and call them the lying *****ers that they are.
We don't fall all over ourselves if they... say my granny fell ill. What part of no refund don't you understand? You are not getting a refund so ****** off.
Air transport is just a glorified bus operation.
We have written back to say "****** off".
(after Belgian authorities asked for money back)

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You have clearly never met the little runt, thoroughly repellant individual, even more unpleasant than Richard Branson, and that is saying something. He is correct in that the airline industry is populated at the higher levels by total scumbags. Some just have better PR than others.

All airlines are going out of business, the ones that will survive are the ones propped up by government, I'll let you figure out who that leaves.

Air fares are about to get very expensive, even if the workers agree to work for free. Like the car industry it is dying.

Travel now, whilst you can, the world is about to get a lot larger.

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You have clearly never met the little runt, thoroughly repellant individual, even more unpleasant than Richard Branson, and that is saying something. He is correct in that the airline industry is populated at the higher levels by total scumbags. Some just have better PR than others.

All airlines are going out of business, the ones that will survive are the ones propped up by government, I'll let you figure out who that leaves.

Air fares are about to get very expensive, even if the workers agree to work for free. Like the car industry it is dying.

Travel now, whilst you can, the world is about to get a lot larger.

+1

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I'm flying around the USA and saw a full airplane for the first time in a while.

Anyway, back to prices. A price for a ticket in one month, East to West coast was $450. Pretty reasonable. Then add on tax $400 !!!!!! seriously that was the cheapest I found. Tax at near 100% we're in the wrong business, start up a government or something. I actually think airlines are hedging against rising fuel.

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I'm flying around the USA and saw a full airplane for the first time in a while.

Anyway, back to prices. A price for a ticket in one month, East to West coast was $450. Pretty reasonable. Then add on tax $400 !!!!!! seriously that was the cheapest I found. Tax at near 100% we're in the wrong business, start up a government or something. I actually think airlines are hedging against rising fuel.

Is that just a single tax or a combination of various taxes? $400 tax on top of a $450 ticket!! :blink::o

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