Strong U.S. demand and a tight job market have given companies a chance to raise prices coming into this year, and they’re testing the waters gingerly.
Southwest Airlines Co. expects improvement in a gauge of pricing power early this year amid strong demand for lucrative business travel and healthy prices for last-minute tickets. Meanwhile, Delta Air Lines Inc. earlier this month warned its ability to raise fares is weakening.
[Skift’s Brian Sumers wrote January 15 about Delta: “Executives said demand and revenue has picked up in January, with corporate bookings up 7 percent year-over-year. They said unit revenue growth for the first quarter will be flat to up to 2 percent, blaming the slow growth in part on the government shutdown.]
Southwest “implemented a system-wide fare increase in late November which we expect to be a benefit throughout 2019,” President Thomas Nealon said on a call. “Our fleet is at full strength and growing. We now have strong revenue management capabilities that we did not have before and we are better prepared to compete in any environment than we were a year ago.”
American Airlines Group Inc. is banking on making its lowest fare category more widely available, because it has found that offering bare-bones tickets makes travelers willing to pay up for a ticket with more frills.
“We’re just going to go up the fare ladder higher,” Don Casey, senior vice president of revenue management, said on a call.
–With assistance from Brendan Case.
©2019 Bloomberg L.P.
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