Southwest Airlines raised airfares $10 each on flights of more than 1000 miles, and $3 on fares between 750 and 1000 miles over the Thanksgiving weekend, Reuters reports. The increase was matched by American, United, and Continental. Jetblue said it had not matched the increase.
Southwest has been able to keep its fares low due to fuel hedging. However, with fuel hedges expiring, and new ones due to be negotiated, as well as rising overall costs, the carrier is now leading a fare increase trend. Southwest’s pilots are also renegotiating their contract at this time.
It is an interesting indicator of Southwest’s power that it is dictating fare hikes to the industry. In previous years, fare increases would often be initiated by legacy carriers and only sometimes matched by Southwest. Southwest is still unique, and likely will always be apart from the legacy carriers, but with a possible wave of consolidation hitting the industry, Southwest may be poised to lead a new cadre of carriers at the top of the industry.
