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U.S. airlines are already rolling back last week’s price hikes

Jan 21, 2013 5:12 am

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The big, legacy airlines were excited about the hike, but the lack of support from JetBlue and Southwest doomed the increase.

— Jason Clampet

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The latest attempt by U.S. airlines to raise domestic fares appears to be a failure.

Started by Delta Air Lines Tuesday, the increase of $10 to $20 for domestic roundtrips on last-minute departures — those inside seven days — was quickly matched by American, United and US Airways. However, Southwest/AirTran and JetBlue did not follow.

As a result, airlines that raised fares began partial rollbacks late Thursday night and Friday, said Rick Seaney, CEO of FareCompare.com.

“Domestic airfare hikes have had historical difficulty weathering a lack of low-cost airline support,” Seaney said in an alert Friday afternoon. “It is rare for partial rollbacks to not end up being completely rolled back — so this hike attempt is likely to collapse completely by the end of the weekend.”

Fares typically rise when one carrier raises prices and other airlines follow. If competitors do not follow, the initiator usually drops back its prices. The latest attempt to raise fares is the sixth this year, though only three have been successful.

“Airlines’ limited success in raising base ticket prices in a tough fuel-cost environment underscores how sensitive consumers — even corporate and last-minute travelers — can be to price,” Seaney said.

Domestic air fares have increased about 5 percent this year and are up about 10 to 12 percent from a year ago.

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