American Leads Airline Price Boost, FareCompare Says



By Juliann Neher and Mary Schlangenstein - Dec 15, 2010 2:22 PM 

American Airlines raised domestic fares as much as $10 round trip, sparking an industrywide increase in ticket prices, according to travel website FareCompare.com.


Pushing up base prices has been difficult because low-cost carriers don’t always go along, Rick Seaney, chief executive officer of Dallas-based FareCompare, said today in a telephone interview. Carriers “can’t afford to be a buck more” than competitors, he said.


The Dec. 13 move by Fort Worth, Texas-based American was matched by U.S. carriers including Continental Airlines, Delta Air Lines Inc., United Airlines, US Airways Group Inc. and Southwest Airlines Co., the largest discounter, FareCompare said. The industrywide participation may make this rate hike one of the few successful ones this year, Seaney said.
“I’ve never seen an airfare hike that Southwest joined that didn’t stick,” he said. “It’s the bellwether.”
The struggle to raise domestic prices across the board has led U.S. carriers to charge higher fees for high-demand periods and sell fewer lower-cost seats, while keeping planes at their fullest since World War II.
American parent AMR Corp. declined 17 cents, or 2.2 percent, to $7.56 at 4 p.m. in New York Stock Exchange composite trading. The Bloomberg U.S. Airlines Index fell 2.3 percent.


To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; Juliann Neher in Washington at jneher1@bloomberg.net






To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net