DALLAS — The airlines’ latest effort to broadly raise U.S. fares by $10 a round trip has crumbled as discount carriers such as Southwest decided not to participate.
After several successful price increases from December through February, two efforts to raise fares this month have died, raising questions about how much consumers are willing to pay for travel.
United and Continental started the push for another fare increase last week and were joined by Delta, American and US Airways. But low-cost airlines never went along.
chief executive Rick Seaney said the price hike began to unravel when Delta and American rolled back the increase on some routes. He said United and Continental then gave up and canceled the increases Saturday.
By Monday morning, US Airways was the only one of the major airlines that still had the higher fares.
It’s unclear whether consumer demand is too weak to absorb further increases or whether the recent failed price hikes are merely a pause before fares rise again heading into the peak summer travel season.
Seaney said domestic price increases will be harder to push through unless they are supported by low-cost airlines — Southwest, JetBlue, AirTran and Frontier.
JPMorgan Chase analyst Jamie Baker said Southwest, which carries the most U.S. passengers and plays a key role in setting fares for the industry, might just be biding its time until Easter. He said Southwest often prefers to raise fares over three-day weekends.
