Fares have been see-sawing this week, reaching a relative high of 464 on Sunday when all of the network carriers joined in on Delta’s fare increase.
Starting on Monday the carriers began their retreat, rolling back the $5 increase in many markets and especially Southwest overlap markets.
The retreat continued yesterday and on top of that United decided to put a bunch of it’s 14-day fares on sale. This has led to successive waves of matching by competitors. While the scope of United’s fare sale is relatively limited, it has definitely helped to bring the index down to 428 with four stars. The star rating indicates that today’s index of 428 is in the bottom quartile of the index for the last two years, i.e. based on our 30 months of history fares are very good.
For the record, I had predicted that the increase by Delta had a good chance of sticking. My rationale was based on the historical fare trends and the annual increase as we head into the higher season. At least for now the carriers do not seem to be able to support increased pricing.
