All’s fair in fares, profits

Just in time for airline earnings season, which kicks off this week with profit reporting from Delta on Tuesday, airfaressearch.jpg followed by the Texas trio of American (Wednesday), Continental (Thursday) and Southwest (later Thursday) comes an important revenue trend. The major carriers, having tried to push through a fare increase for much of the autumn, may finally have succeeded in getting the latest price hike to stick. Following American, most legacy carriers boosted their fares by $5 each way over the weekend, despite some late night faltering by United. That would be, estimates JP Morgan’s Jamie Baker, seven completed network-carrier fare increases out of an even dozen attempts in 2007. Southwest alone raised fares five times during the year, and Baker, who thinks discounters’ fare moves are crucial to industry revenue, sees a sixth increase likely before year-end. While this may sound routine, please note two new concepts here: American initiating a fare increase and Delta expected to post a profit.

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