US airlines are making a new push to raise ticket prices for domestic flights.
This is about the 11th time the industry has positioned itself to raise prices this year, but all the others have failed. While the airlines cannot collude in price increases, as that would be an illegal monopoly, an airline can raise prices, and hope the others do likewise. In these past failed attempts, one of the major airlines would raise prices… but other airlines wouldn’t follow. The prices would then settle back down without an increase. No one wants price themselves out of the market.
This time though, the increase might just stick. Late last week, Delta Airlines raised its prices on flights to Las Vegas, Florida, and Phoenix by $10. JetBlue decided to go along with the gig, raising many of their domestic flights by about $6. US Airways jumped in and added $6 to many of their flights as well.
We’ll have to see what the next week brings to be sure, but with demand expected to be strong going into the Christmas holidays, and American Airlines going into bankruptcy, we may have to live with higher ticket prices, at least through the winter months.
In the meantime, the U.S. Travel Association (USTA) is fending off an apparent attempt by Congress to raise aviation taxes. The Wall Street Journal reported last week that the Obama administration and Congress are working on a plan to raise aviation taxes. The association’s CEO Roger J. Dow said in a statement that raising aviation taxes “discourages travel, hampers job creation and slows economic growth.” According to the Dow, aviation taxes currently account for approximately 20% of the price of an airline ticket.
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