Airlines Raise Fares on Many U.S. Routes

December 29, 2010 - 7:40 AM

Dallas (AP) - Passengers whose travel plans were wrecked this week when thousands of flights were canceled might not want to hear it, but airfares are going up again.

Several airlines confirmed Tuesday that they are raising prices on many domestic routes by $10 one way and $20 per round trip, even as snowbound passengers remained stranded at New York City-area airports.

United, Continental and Delta said they're raising prices effective immediately. Travel website FareCompare.com said American was too, but the airline didn't respond to a request for comment.

Southwest did not immediately go along with the higher prices, which raised the possibility that the other airlines might back down, FareCompare suggested.

The airlines posted strong profits in the third quarter, and traffic has been running higher than a year ago as travel demand slowly recovers from the recession. They didn't offer a reason for the fare hikes.

But FareCompare noted that they are facing rising fuel costs. Oil prices have climbed this year and analysts predict they will rise again in 2011 due to strong demand from developing countries such as China and India.

The fare hikes and surcharges came as airlines were still digging out from a storm that shut down airports in New York, Boston and Philadelphia, leading to at least 7,000 canceled flights. Airlines were adding a few extra flights Tuesday to handle the backlog of stranded passengers, but it was expected to take several days to accommodate all the travelers.

"In the midst of one of the worst travel disruptions of the year that saw thousands of passengers stranded at airports along the Eastern seaboard due to blizzard conditions, airfare prices are on the rise," said FareCompare's Graeme Wallace.

Many passengers on canceled flights are rebooking, but the airlines are likely to lose some revenue to passengers who instead request refunds. An analyst for Dahlman Rose & Co. estimates that the industry could lose $100 million in revenue from this week's cancellations.