Major U.s. Airlines Have Little Luck Raising Fares

[USA320Pilot]

Major U.S. airlines have little luck raising fares

Pricing power has nearly evaporated with weak travel demand and the proliferation of discount carriers

CHICAGO (Reuters) - Gone are the days when U.S. airlines could raise fares at their whim to cover added costs.

See Story

Regards,

USA320Pilot

 

[BoeingBoy]

While I agree with the gist of the article, I am continually amazed by the short memory of the supposed analysts. Does anyone remember when American & Braniff were in heated competition in DFW and Crandel suggested that if Braniff would just raise their fares American would do the same and both could be profitable? Caused quite a stir in government circles.

Since deregulation, there have probably been more failed attempts to raise fares than successful ones - normally because at least one of the network carriers didn't go along, not because of the LCC's.

Jim

 

[Kev3188]

You can usually thank NW for that, Jim.

 

[javaboy]

While I agree with the gist of the article, I am continually amazed by the short memory of the supposed analysts. Does anyone remember when American & Braniff were in heated competition in DFW and Crandel suggested that if Braniff would just raise their fares American would do the same and both could be profitable? Caused quite a stir in government circles.

thats because its called collusion and is against the law.

 

[BoeingBoy]

javaboy,

You are correct - it was attempted collusion and against the law. Hardly fits the "able to raise fares at a whim" picture, however.

Even prior to deregulation, the CAB kept something of a lid on fares. If any airline decided "on a whim" to double the compensation of it's employees, it couldn't just double fares. Of course, the CAB also controlled capacity to a large extent so it could be said they kept a "floor" under fares. I guess what I'm saying is that the CAB controlled fares by the requirement that they review and approve all fares.

Jim