Airfare
analyst and FareCompare CEO Rick Seaney on Thursday declared a United Airlines
domestic fare increase dead after a "tepid" matching response from
competitors forced the carrier to roll back its fares to pre-hike levels.
Yet, within 24 hours, something curious
happened: Southwest Airlines by midday Friday "resurrected" the $4
to $10 roundtrip distance-based domestic fare hike. Only this time, competitors quickly matched, and Seaney deemed
the hike a success, declaring, "What first appeared to be a failed hike
will now become the seventh successful airfare price increase of the
year."
By FareCompare's count, that latest hike gives domestic
airlines a 50 percent success rate in 14 fare hike attempts this year. What's
more, Southwest Airlines, a carrier that has long cast itself as a low-fare
alternative to network carriers, was the moving force behind five of those
seven hikes.
"It
launched four of the year's hikes that stuck—one in concert with JetBlue—and
was responsible for resurrecting the most recent hike initiated by United,
which appeared to be all but dead until Southwest entered the fray and revived
it," according to a post published on the FareCompare.com Website Tuesday
by FareCompare editor Anne McDermott.
While JP Morgan analyst Jamie Baker has
different accounting than FareCompare, counting the latest fare hike as only the fifth success of the year,
he and Seaney are in accordance on Southwest's role as a price leader in the
domestic fare market.
"While factually accurate that numerous
airlines sat out said effort," Baker wrote in a research note last week,
referring the fare increase led by United, "we believe Southwest's lack of
participation was the primary catalyst for failure. With Southwest now raising
fares, apparently on its own terms, we anticipate widespread competitive
matching."
Those
seven hikes that FareCompare counted as sticking in 2012 each have added
between $4 and $20 per roundtrip ticket, varying by length of haul, advance
purchase requirements and other factors.
"By our calculations, all the airfare increases for
2012 add up to an overall domestic airfare increase of approximately 4.5
percent," according to Seaney, who added that “averages are not my
favorite statistic" since fare increases on any given route "can vary
dramatically based on competition and traveler flexibility."