Dallas – Southwest Airlines Co. raised most of its fares by $1 to $10 each way over the weekend, and many competitors quickly matched the move.
Southwest, which boasts about low fares, said it marked its third increase this year after six fare hikes in 2006. An analyst for JPMorgan Chase & Co. said, however, that it was Southwest’s fourth increase this year.
The latest increase, which began showing up Friday, ranged from $1 each way on flights of under 500 miles to $10 on walk-up fares for flights longer than 1,250 miles, Southwest spokeswoman Beth Harbin said.
“It’s still about cost,” Harbin said. “Fuel prices are still extremely high, and we’re making modest adjustments to cover those costs.”
Jamie Baker, an analyst with JPMorgan, said the fare hikes would improve Southwest’s revenue per passenger miles flown, an important measurement in the airline industry. He noted that the increase came soon after Continental Airlines Inc. and US Airways Group Inc. talked about improving demand for air travel.
Most of the big, older airlines matched Southwest’s fare increase.
A competing low-cost carrier, US Airways, also matched, a spokesman said Monday.
The impact of fare hikes by many carriers have been blunted by frequent discounting. But Baker said that when Southwest pushes fares higher, “we do sit up and take notice and expect the market to do the same.”
Fare increases can fail if any of the major airlines refuse to go along because other carriers don’t want to be left charging a higher price.
