Airlines hiked ticket prices 20% this year because jet fuel costs doubled, but don’t expect fares to dip when gas gets cheaper.
United CEO Scott Kirby told investors that as long as passengers keep paying higher fares, the airline will keep them in place no matter how much fuel costs. And it’s not just United. American Airlines CEO Robert Isom echoed the strategy, saying he’s “bullish” about keeping higher prices because customers have already shown they’ll pay more for extras like legroom and better seats. Southwest Airlines reported five industrywide fare hikes so far this year.
The strategy is working because demand remains strong despite higher prices. Summer bookings haven’t slowed even as airlines raised fares. Airlines are also cutting less profitable flights, removing bargain fares from the market and lifting average ticket prices. And if Spirit Airlines goes out of business, discount competition disappears entirely. Rep. Ritchie Torres called United’s plan “corporate greed,” saying everyday Americans are being priced out of air travel.
Airlines hiked ticket prices 20% this year because jet fuel costs doubled, but don’t expect fares to dip when gas gets cheaper.
United CEO Scott Kirby told investors that as long as passengers keep paying higher fares, the airline will keep them in place no matter how much fuel costs. And it’s not just United. American Airlines CEO Robert Isom echoed the strategy, saying he’s “bullish” about keeping higher prices because customers have already shown they’ll pay more for extras like legroom and better seats. Southwest Airlines reported five industrywide fare hikes so far this year.
The strategy is working because demand remains strong despite higher prices. Summer bookings haven’t slowed even as airlines raised fares. Airlines are also cutting less profitable flights, removing bargain fares from the market and lifting average ticket prices. And if Spirit Airlines goes out of business, discount competition disappears entirely. Rep. Ritchie Torres called United’s plan “corporate greed,” saying everyday Americans are being priced out of air travel.
