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Article Excerpt
With 10 published airfare hikes, high fare growth and planes that were exceedingly full, domestic airlines in 2006 wielded a level of pricing power not seen in recent years. However, according to airfare data, pricing power appeared to soften as the year progressed, and overall fares are expected to grow modestly this year.
Domestic carriers are maintaining an aggressive posture so far this year to maximize passenger revenue. The major domestic carriers are batting .500 for published fare increases, with two hikes in January--one successful, the other a strikeout. At press time on Friday, Delta raised fares system-wide by $5 per way.
Last year, average domestic fares grew by nearly 10 percent, according to carrier figures and Calyon Securities forecasts, which show that fares have grown steadily since 2004. In 2005, the average fare increased by nearly 3 percent, but last year fares saw their biggest boost--growing by nearly 10 percent among the Big Six carriers and 8.3 percent by such other domestic carriers as AirTran, Frontier, JetBlue and Southwest.
Growth is expected to moderate this year,...
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