Delta Says Happy New Year With Fare Hikes
Joe Cortez January 06, 2016
Delta Air Lines spurs first airfare increase of 2016, followed by fellow legacy carriers.
Despite the hopes of lower airfare in 2016, one legacy carrier has elected to make a subtle increase to their ticket prices, spurring an overall in the aviation industry. On Monday, January 4, Delta Air Lines increased their fares by up to $8 on certain routes. The increase was matched by Southwest Airlines by the end of Monday, followed by United Airlines and American Airlines by the next day.
The fare hike was discovered by Farecompare analyst Rick Seaney. In looking at 2016 airfare, analysis discovered price increases of up to $4 on one-way fares in both business and economy class. Furthermore, the increases are wide-reaching, effective on flights as short as 300 miles, all the way up to flights as long as 2,700 miles.
“I was a little surprised at the timing of the hike, given recent economic indicators,” Seaney wrote on Farecompare.com. “But what the airlines are doing is what they’ve always done: probing consumers’ appetite for travel by determining their pain-point on price.”
The price hikes are in line with both expert predictions and airline announcements made throughout the month of December. In the American Express Global Business Travel 2016 annual forecast, experts predicted business travel expenses will increase, leading more business travelers to lean on shared services to keep costs at a minimum. In addition, Delta announced they would limit their seating capacity in 2016 to keep airfare competitive in the marketplace.
Although the increases are in place now, there is potential the airlines will rescind the fare hike. Between predictions of low jet fuel prices and consumer demand, the increases may be temporary.
“This hike could still roll back,” Seaney writes. “Consumers will let the airlines know by accepting or rejecting the higher prices as they return to airfare shopping for Spring Break and business travel now that the holidays are past.”
[Photo: Charlie Riedel / Associated Press]
I think it's too early to conclude some "fare hike". Air fares change day to day and week to week. It's only been about one week into 2016 so it's inconclusive to say if the price increases have anything significant indication. It could well be just another regular weekly price fluctuation.
It's hard for most consumers to notice the effects of a $8 rate hike when prices vary MUCH MORE THAN THAT that from midweek to weekend and/or from one week to the next as well as depending on destination (for those consumers who don't always fly to the same destination). It's only easy for statisticians to notice it, or perhaps from consumers who always buy at the same time (say, 6 weeks out) consistently after a while (but still not likely quickly, unless they're always buying tickets on the same route AND the same number of days out).