From Newsday--
Just as the summer travel season gets into full swing, Delta Air Lines yesterday raised some ticket prices a stunning $100, citing spiraling fuel costs that threaten to push the carrier toward bankruptcy.
Three other major carriers - Continental Airlines, United Airlines and USAirways Group - almost immediately matched Delta's fare increase, and analysts expect other airlines to do the same.
Delta, the nation's third-largest airline, raised the cap on fares purchased just before travel to $599 each way, from $499, and first-class tickets to $699, from $599. Affected fares account for about 6 percent of tickets sold, the Atlanta-based airline said.
Delta's fare hikes come six months after it initiated a program it called "SimpliFares," which brought some of the steepest cuts in the industry in years. The program slashed domestic ticket prices as much as 50 percent and dropped restrictions on Saturday night stays. The no-Saturday night stay requirement remains in effect.
"When Delta launched SimpliFares in January, crude oil was selling at $43 per barrel compared to as much as $61 per barrel in recent weeks," Paul Matsen, Delta's chief marketing officer, said in a statement. "Despite our best intentions to keep the current fare caps in place, we have been forced to find ways to offset this dramatic spike in costs."
Delta has been struggling to remain out of bankruptcy after losing money for the past several years.
Investors sent Delta's stock skyward, to a close of $3.98, a 15-percent jump.
"I was surprised by the $100," said Robert W. Mann Jr., an independent analyst and consultant in Port Washington. "I would have guessed a $20 change. Mann said he was not sure if the hikes could be sustained.
The sharp fare hikes by Delta and the other airlines come as the summer travel season is in full motion. However, analysts said, many summer travelers have purchased tickets far in advance and won't be affected by the higher costs. The impact is most likely to be felt by business executives.
Terry Trippler, an airline expert at the Web site cheapseats .com, said that Delta's new fares still are far lower than they had been in December, when many domestic ticket prices were $800 and $900. The new hikes, Trippler said, are likely to be in place for some time.
A spokesman for Continental in Houston said, "All I can tell you is that we did match Delta's fare and the match was effective today. Whatever Delta did, we did." A United spokeswoman said the Chicago-based carrier matched Delta "in areas where we go head-to-head with them."
Just as the summer travel season gets into full swing, Delta Air Lines yesterday raised some ticket prices a stunning $100, citing spiraling fuel costs that threaten to push the carrier toward bankruptcy.
Three other major carriers - Continental Airlines, United Airlines and USAirways Group - almost immediately matched Delta's fare increase, and analysts expect other airlines to do the same.
Delta, the nation's third-largest airline, raised the cap on fares purchased just before travel to $599 each way, from $499, and first-class tickets to $699, from $599. Affected fares account for about 6 percent of tickets sold, the Atlanta-based airline said.
Delta's fare hikes come six months after it initiated a program it called "SimpliFares," which brought some of the steepest cuts in the industry in years. The program slashed domestic ticket prices as much as 50 percent and dropped restrictions on Saturday night stays. The no-Saturday night stay requirement remains in effect.
"When Delta launched SimpliFares in January, crude oil was selling at $43 per barrel compared to as much as $61 per barrel in recent weeks," Paul Matsen, Delta's chief marketing officer, said in a statement. "Despite our best intentions to keep the current fare caps in place, we have been forced to find ways to offset this dramatic spike in costs."
Delta has been struggling to remain out of bankruptcy after losing money for the past several years.
Investors sent Delta's stock skyward, to a close of $3.98, a 15-percent jump.
"I was surprised by the $100," said Robert W. Mann Jr., an independent analyst and consultant in Port Washington. "I would have guessed a $20 change. Mann said he was not sure if the hikes could be sustained.
The sharp fare hikes by Delta and the other airlines come as the summer travel season is in full motion. However, analysts said, many summer travelers have purchased tickets far in advance and won't be affected by the higher costs. The impact is most likely to be felt by business executives.
Terry Trippler, an airline expert at the Web site cheapseats .com, said that Delta's new fares still are far lower than they had been in December, when many domestic ticket prices were $800 and $900. The new hikes, Trippler said, are likely to be in place for some time.
A spokesman for Continental in Houston said, "All I can tell you is that we did match Delta's fare and the match was effective today. Whatever Delta did, we did." A United spokeswoman said the Chicago-based carrier matched Delta "in areas where we go head-to-head with them."
and drive or take other methods of transportation (amtrak, greyhound, etc..). In the long run, the airlines should keep the airfares AT cost.
(I believe the Soviet Union once tried something like this!)
