Airfares going up another $10

By Meghan Dunn, CNN business news staff


NEW YORK (CNNMoney) -- Airfares are going up yet again.

Late Tuesday, Southwest Airlines raised all of its round-trip fares by $10. Delta (DAL, Fortune 500) initiated this latest round of price increases on Monday, and as of midday Wednesday American Airlines (AMR, Fortune 500), JetBlue (JBLU) and United Airlines (UAL) had matched it.

Industry experts say the $10 increase is likely to be adopted industrywide.

If so, this would mark the seventh time this year that domestic airlines have jacked up fares.

In the past five years, no industrywide attempt to raise fares failed when Southwest was on-board.

Southwest (LUV, Fortune 500) blames the price of fuel.

"This higher fare is to offset higher fuel costs that we continue to face in the industry," said company spokeswoman Laurel Moffat.

This year is similar to 2008, when oil prices were surging and oil hit a record high of $145 a barrel. In 2008, there were 17 successful hikes.

Oil was trading at about $111 a barrel on Wednesday.

Rick Seaney, CEO of FareCompare.com, said the industry is "on pace to break that record this year," though he believes prices won't go too high.

"In 2007, it was not unusual to have one-third of a plane empty," Seaney said. "Today to keep revenues up, planes have to be full. And to fill up those planes, you have to be price conscious. So prices can't get too out of whack."

When airlines announce these price increases, they are doing two things: gauging consumer appetite and the willingness of competitors to follow. Airlines are only able to charge higher prices if customers are willing to pay. And, these hikes aren't successful unless most or all competitors match the hike.

If only one airline announces a hike, it will end up on the last few pages on airline ticket comparison sites -- effectively out of view for many online shoppers.

Industry experts believe that fliers will see more airfare hikes throughout the year. Seaney said it wouldn't surprise him if we saw one a week for the next month.

And with the summer travel season right around the corner, consumers can expect even higher airline prices.

Between June 9 and Aug. 21, airlines are charging additional summer premiums. Last year was the first year that airlines started charging summer premiums.

Demand is typically higher at this time or year, so airlines are able to charge more.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,156.85 24.88 0.15%
Nasdaq 4,562.19 9.43 0.21%
S&P 500 2,001.57 2.59 0.13%
Treasuries 2.60 0.01 0.42%
Data as of 6:32pm ET
Company Price Change % Change
Bank of America Corp... 16.77 0.06 0.36%
Apple Inc 101.58 0.72 0.71%
Yahoo! Inc 42.59 -0.12 -0.28%
Microsoft Corp 46.52 -0.24 -0.51%
Alcoa Inc 16.28 0.12 0.74%
Data as of 4:03pm ET

Sections

Breast implants and other medical supplies are the most recent items on a long list of scarce products in Venezuela. More

The Federal Reserve is probably not going to raise interest rates until the summer of 2015 at the earliest. More

Apple's new HealthKit platform, set for release in conjunction with the new iOS8, has been delayed by a bug. More

Frederick Hutson launched Pigeon.ly in 2012 to help inmates communicate with their friends and family. He's on target for $1 million in sales this year. More

Are you living for your job? Working around the clock? These questions will help you determine whether you've ventured into workaholic territory. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.