Domestic Airfare Hike #7 Underway – Deja Vu Time Again
The calendar may say March, but it sure feels like Groundhog Day.
Make that, Groundhog week. On Thurday evening (March 9), American Airlines filed a $10 roundtrip domestic airfare hike; the 7th airfare hike attempt of 2011. And neither Canada nor Hawaii was spared as prices were lifted by $21 roundtrip on those routes.
Eerily, 2011 is tracking in lockstep with the first nine weeks of 2008 – take a look at the figures, “then and now”:
- March 9, 2008 – Oil hits $105/barrel
- March 9, 2011 – Oil hits $104/barrel
Another “then and now”:
- As of March 7, 2008 – 7 domestic airfare hike attempts (5 successful)
- As of March 9, 2011 – 7 domestic airfare hike attempts (6 successful)
If history continues to repeat itself, we should see weekly hike attempts of at least $10 roundtrip through the end of April – just as we did in 2008 (note: oil hit $115/barrel in April ‘08).
As Yogi Berra once said, “It’s déjà vu all over again.”
I expect the legacy airlines to continue such hike attempts on a weekly basis, and to see “hike matching” as a tight knit group (save the rare resistance of US Airways); I also expect these airlines to watch intently to see if their low cost carrier brethren hop on board. If that doesn’t happen, the legacies will have no choice but to rollback their airfare hikes or tiptoe around the low cost carrier routes to maintain competitive equilibrium.
Taking into account summer travel surcharges, our internal index of average cheapest domestic roundtrip prices between the top 50 U.S. cities is nearly at the same levels we saw peak in June of 2008.
The $10,000,000 question: When will consumers begin to push back – if at all?
Today, as legacy airlines continue to pull the seat capacity-cutting rip cord, it is pretty clear that the pushback has not yet started – not just yet.
We’ll update as any matching or rollback activity unfolds over the next few days.
Date: March 10th, 2011 @ 02:19
Categories: Independent Travel