DALLAS — Southwest Airlines has joined a sweeping increase of $10 in the price of many domestic round- trip airfares, citing the need to offset high fuel prices.
Southwest’s action over the weekend may have ensured success for a price hike by major airlines that seemed to be faltering. Southwest carries more U.S. passengers than any airline and wields great influence over prices.
It’s the sixth time airlines have raised fares this year.
chief executive Rick Seaney says leisure travelers may now have to pay $260 for a ticket that cost $200 on Jan. 1.
The airlines say they need the money.
“Fuel prices are up every week, and the fare increases aren’t keeping pace with fuel-cost increases,” Southwest CEO Gary Kelly told The Associated Press.
Kelly said Southwest is on pace to spend $1.3 billion more on fuel this year than last year. That’s nearly triple the airline’s $459 million net income for 2010, or about $15 per customer.
Kelly doesn’t think higher fares are driving away customers.
Southwest reported Monday that February traffic, measured in miles flown by paying passengers, jumped 13 percent from the same month last year.
Jet-fuel prices have risen more than 50 percent in the past year to more than $3 a gallon, although most airlines have offset some of the increase through hedging — in effect, paying extra to lock in the top price they’ll pay for some of their fuel.
The latest airfare increase started early last week. Delta tried to raise many fares by up to $20 per round trip, but other big airlines sided with a $10 increase started by American.
Southwest waited three days before matching American’s move Friday night. Other airlines had rolled back fare hikes on routes where they compete with Southwest and other discount carriers, but they revived the full increase once Southwest raised prices too, Seaney said.
Frontier makes adjustments
Frontier Airlines said passenger traffic in February increased 2 percent to 853 million revenue passenger miles.
Frontier also said it is trimming its operating schedule for the second quarter of 2011 because of uncertainties in oil prices. While the airline previously had expected to grow in the second quarter, its capacity is now expected to be flat compared with the same period last year. The Denver Post
