After American Airlines raised fares last week, all the other majors followed—for about three days. Delta bolted first, and yesterday United and American caved:
The increase, which was from $6 to $16 round-trip, was initiated last week by AMR Corp's American Airlines and later matched by rivals, including Delta Air Lines and Continental Airlines, said Farecompare Chief Executive Rick Seaney.
The airline industry has been groping for pricing power after demand for business travel sagged during the economic downturn of 2008 and 2009.
Seaney said Delta was the first to retreat from the hike, followed by American, Continental and UAL Corp.s United Airlines.
The price rise evidently reduced the number of seats bought past the point where it made sense. That's great for travelers in the short term, but in the long term, all the majors have serious financial problems. Low prices don't help much.
Still, American went ahead and released its weekly Net Sa'aver fares, including $259 Chicago to London, $323 to Brussels, and only $70 to Toronto (each way).
The Toronto route is on sale most likely because people (a) may not want a long weekend on the north shore of Lake Ontario in the middle of winter; and (b) the airline, at the TSA's insistence, has added severe restrictions on carry-on luggage to and from Canada. And that $70 fare? A round-trip with taxes is actually $205, which isn't bad, but it's not exactly a give-away.