Increasing energy costs leading to airline fare hikes

In the sixth such move since the first of the year, most airlines have elevated their ticket prices. Fare increases are generally an industry-wide move, with a few holdouts. This increase is significant as the usual holdout, Southwest, has followed suit. The increase is being blamed on rising oil costs.

Flying costs are merely increasing

There was a $60 boost this year in the average airline ticket prices, in accordance with airline industry reports. A ticket that would have cost $200 on January 1, 2011, now costs $260. Not all of the airlines did this price adjustment though. The rise wasn't something they needed to do. The prices go down typically unless all airlines raise them. Even though normally Southwest Airlines doesn't raise its costs, it did this time. The most recent $10 increase occurred at Southwest too.

Gas expenses for low-cost airlines

In the U.S., you will find several low-cost airline service providers including Southwest Airlines. Traditionally, Southwest Airlines has avoided many of the fees and rate hikes that larger airlines have undertaken, in an effort to keep customers. JetBlue and AirTran are also low-cost service providers that attempt to keep their prices low. These lower profit margins, however, open the carriers up to more price volatility. When a barrel of oil price raises $10; so will the cost of tickets. This is how the change typically works. Three times the income Southwest made in 2010 can be spent in 2011 with about $1.3 billion on fuel, which the Southwest CEO explained.

Traveling getting more costly

As airlines are raising their fares, travel in the United States in general is getting more costly. Sometimes, an individual has to travel a long distance. There are not many possibilities for that individual though. Certainly airlines are always an option. Driving is also a choice, though the increasing price of gasoline can often put the cost of a long-distance trip relatively close to that of an airfare ticket. The increasing oil prices are leaving even bus trips more costly. In some places, it is an option to do rail travel. Nevertheless, a ticket that was $50 in 2008 is now going to cost about $150. There is more theory put into high-speed rails than other things.

Articles cited

WSBTV

wsbtv.com/news/27110644/detail.html

USA Today

travel.usatoday.com/flights/post/2011/03/another-day-another-fare-hike/146578/1

News OK

newsok.com/fuel-costs-force-southwest-to-add-10-to-ticket-cost/article/3546778