American Airlines increases domestic airfares
A hike of $10 per round trip in the domestic fares by American Airlines, can lead to increase in the fares for the seventh time this year, by U.S. airlines.
American Airlines announced the price change on Wednesday, and increased the round-trip fares to Canada and Hawaii by $20.
Increase in fares by other airlines expected soon
Though there is no information about other major airlines making similar declarations by the weekend, changes are expected soon following the step taken by American Airlines.
In order to keep pace with the rising cost of jet fuel, carriers have been increasing fares in lockstep this year.
Commenting on the continuously increasing fares by the airlines, Rick Seaney of FareCompare.com said, "Airlines who finally started making a profit late last year have little choice but to pass on fuel costs to consumers in the short term.”
Rising cost of fuel responsible for increased airlines fares
Matthew Jacob, senior airline analyst at ITG Investment Research blames the rising cost of fuel, for the increasing fares of airlines.
Jacob said, "It's not just because oil prices are high that they're focusing on getting the highest airfares they can. This is a business that has always had very dynamic pricing. You can book a flight now and pay a different price than someone who booked it yesterday and more than someone who books it tomorrow."
Some people may also be forced to drop their plan of traveling by air, due to the increased airline fares.
Commenting on the present situation, Jacob added, "One thing that could be a speed bump to raising airfares further is if consumer travelers start to see their income pinched by ... higher gasoline prices. Higher oil prices may make the airlines more aggressive, but fliers are not necessarily going to be willing to pay a higher airfare."