Are the airlines realizing that high fuel costs are here to stay? Nice to see the effort by so many of the carriers to raise fares, and even nicer to see the fares sticking. I thought it was interesting to see that just one of these increases can counter $5 per barrel of oil.
I know UA just had a record daily load factor last Saturday, and it wasn't even during a summer, Thanksgiving, or Christmas holiday. The demand is definitely there. Even if these increases lower the load factor by one or two points, the loads will still be in the 90% range, unheard of for this time of the year. Other airlines also have heavy loads, so it is great to see a little "supply vs. demand" pricing finally go into effect!
EA CO AS From United States of America, joined Nov 2001, 13930 posts, RR: 61
Reply 2, posted (10 years 1 week 2 days ago) and read 2396 times:
Exactly as Charles pointed out - record load factors do not a profit make. If UA is still losing money with record LFs, this tells me they don't have anywhere to go - since odds are the LF will only head downward, not upward even further.
Yields have to improve for everyone, and fast.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Mattnrsa From United States of America, joined Dec 2002, 401 posts, RR: 1
Reply 4, posted (10 years 1 week 2 days ago) and read 2361 times:
That's why it's so encouraging to see three fare increases in such a short time. I know many of the US carriers have been reporting huge losses with record load factors. My point was only that the demand is there, and the airlines can easily sacrifice a few points of load factor if the fares are $50-$100 more per round trip. Back in the 90s the load factors were nowhere near what they are now, but record profits were all over the place.
I'm hopeful that these fare increases are the first step to an industry recovery.