kjs1976
Thanks for the magic, Walt!
- Joined
- Jun 15, 2001
- Messages
- 2,573
This just in on yahoo news...
Southwest Airlines raises fares
NEW YORK (Reuters) - Southwest Airlines Co. (NYSE:LUV - news) raised its air fares by up to $10 for a one-way ticket, seeking to offset $600 million in estimated additional fuel costs this year, a spokesman said on Monday.
Other big airlines, including Continental Airlines Inc. (NYSE:CAL - news), Northwest Airlines Corp. (Other OTC:NWACQ - news), US Air Group Inc. (NYSE:LCC - news), Delta Air Lines Inc. (Other OTC
ALRQ - news), AMR Corp.'s (NYSE:AMR - news) American Airlines, and UAL Corp.'s United Airlines (Nasdaq:UAUA - news) followed Southwest's fare hike, which occurred late on Friday.
Alaska Air Group Inc. (NYSE:ALK - news) said it increased fares for transcontinental flights $10 each way over the weekend, though it said the move was not a direct match of the Southwest hike.
It was the second fare boost this year for Southwest, which has made a name for itself as a low-fare carrier but faces a growing cost burden as it enjoys less protection from contracts that protect it from higher fuel costs.
"There comes a point where you have to be realistic," said Southwest spokesman Ed Stewart. "Even the most savvy of analysts would agree that fuel is something we just have to keep an eye on."
The fare increases ranged from $2 for short-haul flights to $10 for "walk-up" unrestricted fares, boosting the price for the latter above a $299 cap Southwest had had in place since 2002, Stewart said.
Southwest's hedges have provided a shield against high fuel prices that have allowed it to be profitable even while raising fares only moderately. Its fare restraint has acted as a brake on rival airlines.
Those hedges are gradually expiring, though, increasing pressure on Southwest to raise revenues and cut costs.
"Southwest is a carrier flying into significant cost headwinds," JP Morgan analyst Jamie Baker said in a research note that broke the news of the fare hike. "Each year its fuel hedges roll ever higher, and its labor costs are swimming upstream against a steady downward industry current."
Baker said the increase was the largest Southwest had ever taken and that its push to raise fares bodes well for industry profitability overall.
Southwest shares closed up a penny at $17.14 on the New York Stock Exchange, outperforming the Amex Airlines index (^XAL - news) index, which was down 1.2 percent
Southwest Airlines raises fares
NEW YORK (Reuters) - Southwest Airlines Co. (NYSE:LUV - news) raised its air fares by up to $10 for a one-way ticket, seeking to offset $600 million in estimated additional fuel costs this year, a spokesman said on Monday.
Other big airlines, including Continental Airlines Inc. (NYSE:CAL - news), Northwest Airlines Corp. (Other OTC:NWACQ - news), US Air Group Inc. (NYSE:LCC - news), Delta Air Lines Inc. (Other OTC
ALRQ - news), AMR Corp.'s (NYSE:AMR - news) American Airlines, and UAL Corp.'s United Airlines (Nasdaq:UAUA - news) followed Southwest's fare hike, which occurred late on Friday.Alaska Air Group Inc. (NYSE:ALK - news) said it increased fares for transcontinental flights $10 each way over the weekend, though it said the move was not a direct match of the Southwest hike.
It was the second fare boost this year for Southwest, which has made a name for itself as a low-fare carrier but faces a growing cost burden as it enjoys less protection from contracts that protect it from higher fuel costs.
"There comes a point where you have to be realistic," said Southwest spokesman Ed Stewart. "Even the most savvy of analysts would agree that fuel is something we just have to keep an eye on."
The fare increases ranged from $2 for short-haul flights to $10 for "walk-up" unrestricted fares, boosting the price for the latter above a $299 cap Southwest had had in place since 2002, Stewart said.
Southwest's hedges have provided a shield against high fuel prices that have allowed it to be profitable even while raising fares only moderately. Its fare restraint has acted as a brake on rival airlines.
Those hedges are gradually expiring, though, increasing pressure on Southwest to raise revenues and cut costs.
"Southwest is a carrier flying into significant cost headwinds," JP Morgan analyst Jamie Baker said in a research note that broke the news of the fare hike. "Each year its fuel hedges roll ever higher, and its labor costs are swimming upstream against a steady downward industry current."
Baker said the increase was the largest Southwest had ever taken and that its push to raise fares bodes well for industry profitability overall.
Southwest shares closed up a penny at $17.14 on the New York Stock Exchange, outperforming the Amex Airlines index (^XAL - news) index, which was down 1.2 percent
I know the carriers have to do this, but it is killing me! Our trip is in August and 1/2 the cheaper airlines have not released their schedules yet...and the gas prices just keep going up! I'm telling you, if we had 2 more days we'd drive. Gas for the van would not be cheap, but at least I'd have some closure on our travel plans!
