mattnrsa
Posts: 360
Joined: Tue Dec 10, 2002 12:27 pm

Third Fare Increase In Less Than A Month!

Thu Mar 24, 2005 1:30 am

http://biz.yahoo.com/rb/050322/airlines_northwest_3.html

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!
 
ctbarnes
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RE: Third Fare Increase In Less Than A Month!

Thu Mar 24, 2005 1:53 am

The load factors are there, but the ultimate question is whether the higher fares will significantly stem the airlines money hemorrhage?

Charles, SJ
The customer isn't a moron, she is your wife -David Ogilvy
 
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EA CO AS
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RE: Third Fare Increase In Less Than A Month!

Thu Mar 24, 2005 2:02 am

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

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
NWAFA
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RE: Third Fare Increase In Less Than A Month!

Thu Mar 24, 2005 2:26 am

Raise the fairs - They need to go up at least 30% more!
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mattnrsa
Posts: 360
Joined: Tue Dec 10, 2002 12:27 pm

RE: Third Fare Increase In Less Than A Month!

Thu Mar 24, 2005 2:27 am

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.
 
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EA CO AS
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RE: Third Fare Increase In Less Than A Month!

Thu Mar 24, 2005 2:39 am

Raise the fairs - They need to go up at least 30% more!


You can't raise fares too quickly, though - if you raise them too much, too fast, the demand dries up as well and then we're back to having to lower fares to stimulate demand.

It has to be done slowly, bit by bit. So far it's working.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group