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American Airlines

American and Southwest Raise Their Summer Prices

American and Southwest Raise Their Summer Prices
Joe Cortez

This summer, the thermometer isn’t the only thing going up. Economic indicators also suggest your airfare will increase as well. In April 2019, airfare took a step higher according to data from the U.S. Department of Labor – and already in May, two airlines are leading the way in increased fares.

If you’re planning on flying anywhere this summer, be prepared to pay extra. Several different economic indicators suggest your airfare will increase by some amount over the sunny months of the year.

According to data released by the U.S. Department of Labor, airfare increased in April 2019 by 3.5 percent. While the price was still lower compared to the same time last year and showed little change when seasonally adjusted, the increase is still noticeable for those purchasing tickets now compared to March.

To make things worse, each of the major carriers quietly increased their airfares as well. As observed by Chicago Business First, American Airlines and Southwest Airlines brought fares up by $5 each way – adding up to $10 per round-trip ticket, per flyer. Seeking Alpha notes it was immediately noticed and matched by all of the major American carriers: Alaska Airlines, Delta Air Lines and United Airlines.

What’s forcing the airfares to increase in time for the summer months? Analysts point to two key problems the airlines are facing. First, carriers – including low-cost carriers are decreasing their total seats available. Because availability is growing slower and tightening, competition is decreasing allowing airlines to charge more for their seats.

The other issue revolves around the ongoing situation with the Boeing 737 MAX. With over 300 airframes on the ground, airlines are scrambling to make up for the lost productivity. In addition, airlines have no idea when they may return.

“All the airlines have some extra planes at any period of time,” Phillip Bagley, analyst for Standard & Poor’s, told CNN Business. “But in the summer the system is strained more tightly.”

Finally, profits could also play into the situation as well. In 2018, data from the U.S. Department of Transportation shows airlines brought in $11.8 billion – down nearly 25 percent compared to all of 2017.


[Image: Shutterstock]

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