Advertisement

U.S. airlines hike fares for second time in 5 weeks

By
Nicholas Sakelaris
Some U.S. carriers have increased fares at a time when some experts expected they would drop. File Photo by Brian Kersey/UPI
Some U.S. carriers have increased fares at a time when some experts expected they would drop. File Photo by Brian Kersey/UPI | License Photo

June 14 (UPI) -- For the second time in just over a month, several U.S. airlines are increasing fares for the busy summer travel season.

The airlines see strong demand and a short supply of available seats as factors spurring the hikes -- which are partly because Boeing's 737 Max fleet is still on the ground.

Advertisement

This week, American Airlines raised fares by $5 for one-way U.S. flights, and Southwest Airlines and Hawaiian Airlines followed with hikes of their own.

The increases have boosted airline stocks. Shares of American rose nearly 6 percent Thursday, while shares of Southwest climbed 3 percent and Hawaiian 2 percent.

Some analysts had expected fares to stay constant, or fall, due to months of declining fuel costs, and the fact that some U.S. carriers last hiked fares just five weeks ago.

"We were obsessing over domestic fares much less than usual, given what we viewed as a low probability of further increases," JPMorgan Chase analyst Jamie Baker said. "We are pleased that our skepticism was proven ill-placed."

Southwest raised some fares as much as $15 each way, Baker said. Known as a discount carrier, Southwest said it hasn't increased fares across the board in any market.

Advertisement

American, Southwest and United fly the only 737 Max fleets in the United States. United has said its Max 9 airliners will stay on the ground until early August, and American and Southwest said their Max 8s are down until early September, at the earliest.

Latest Headlines