Flight cutbacks at some major U.S. airlines, including bankrupt carriers Northwest Airlines Corp. (NWACQ) and Delta Air Lines Corp. (DALRQ), have helped airlines raise domestic air fares by an average of about 8% this year, a trend they hope to continue.
Airlines can't talk about specific plans to raise ticket prices, due to concerns related to antitrust laws. But carriers will try for further fare hikes this spring as seats get more scarce. Strong passenger traffic, along with better ticket pricing, should put the airline industry back in the black in 2006, recovering from the long downturn following the attacks of Sept. 11, 2001.
Calyon Securities analyst Ray Neidl said he's staying conservative about capacity cutbacks this year. He expects U.S. capacity to be flat or down 1% at the end of 2006.
But, he said, airlines this spring will test ticket price hikes, especially in markets served by Delta and Northwest. The only worry, he said, is the high price of jet fuel, the biggest single cost for most airlines. So far this year, fuel prices appear to be stabilizing, following a huge run-up in 2005.
At an airline investor conference last week, David Neeleman, chief executive of JetBlue Airways Corp. (JBLU), and Laura Wright, chief financial officer of Southwest Airlines Co. (LUV), said their airlines' plans include raising ticket prices to cover higher costs. In recent years, those airlines have led the charge for cheap tickets.
MarketWatch
Airlines can't talk about specific plans to raise ticket prices, due to concerns related to antitrust laws. But carriers will try for further fare hikes this spring as seats get more scarce. Strong passenger traffic, along with better ticket pricing, should put the airline industry back in the black in 2006, recovering from the long downturn following the attacks of Sept. 11, 2001.
Calyon Securities analyst Ray Neidl said he's staying conservative about capacity cutbacks this year. He expects U.S. capacity to be flat or down 1% at the end of 2006.
But, he said, airlines this spring will test ticket price hikes, especially in markets served by Delta and Northwest. The only worry, he said, is the high price of jet fuel, the biggest single cost for most airlines. So far this year, fuel prices appear to be stabilizing, following a huge run-up in 2005.
At an airline investor conference last week, David Neeleman, chief executive of JetBlue Airways Corp. (JBLU), and Laura Wright, chief financial officer of Southwest Airlines Co. (LUV), said their airlines' plans include raising ticket prices to cover higher costs. In recent years, those airlines have led the charge for cheap tickets.
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