Business fare rollback

Bob Moon Aug 22, 2006
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Business fare rollback

Bob Moon Aug 22, 2006
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TEXT OF STORY

LISA NAPOLI: Just when it looked like air fares might take off again, United and American Airlines are doing a 180. They’ve backed away from raising business fares by $5 for one-way trips and $10 for roundtrips. Marketplace’s Bob Moon reports, that may not necessarily be bad news for the airlines.


BOB MOON: So what if the fare increase didn’t stick?

As industry expert Terry Trippler sees it, just the attempt by United, American and Delta to raise business fares suggests they’re getting a firmer hand on the controls.

TERRY TRIPPLER: “The airlines have gained some pricing power. Started last Thanksgiving, and it has continued on and this recent attempt to increase fares shows that pricing power is still there.”

That may seem counterintuitive, but Trippler sees the glass as half full, since this has all played out a little more than a week after heightened security concerns.

TRIPPLER:“Many of us would not have been surprised to see a big sale, or airfares drop. Instead the opposite occurred, means good news for the industry.”

Indeed, with three of the major airlines so quick to nibble at the idea, Trippler says fares could yet rise.

TRIPPLER:“I would not be surprised to see an attempt made this coming weekend, or the weekend after.”

Trippler says the airlines have been more successful than not in nudging fares up during the past year.

In Los Angeles, I’m Bob Moon for Marketplace.

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