Greetings,

I want to first introduce myself, Rick Seaney, CEO, FareCompare.com.

I will be taking over the FareCompare.com Macro Email Alerts and Analysis starting today (Neil is transitioning to other endeavors).

My goal over the coming months will be to further refine these alerts so that they provide you first access to significant airfare events and insight into each events current and historical context.

If you have a moment, I would like to have brief call to personally meet and discuss any suggested improvements we can make to these alerts.

My contact information is below. A brief alert about Northwest increasing fares by 2% between the U.S. and Canada last night at 8pm follows:

Best Regards,

Rick Seaney

CEO, FareCompare.com

(office) +1 972 755 1058 x218

(cell) +1 214 244 2967

mailto:rick.seaney@farecompare.com

Thursday, May 24 2007

North American Airfares are distributed by the Airline Tariff Publishing Company (ATPCO) Weekdays at 10am, 12:30pm and 8pm Eastern Time.

FareCompare.com - The Airfare Tracking Website, with its proprietary airfare processing software, notes this evening at 8pm Northwest Airlines filed a 2% increase on airfare between the U.S. & Canada.

For business airfares(7 day advance purchase or less)this increase represents an additional$40 roundtripfrom/to Northwest HubsMinneapolis/Detroit and $33from/to Memphis.

This airfare filing is on the heals of a 2.5% increase by Air Canada and match by United Airlines on Tuesday.

Three of the major six domestic airlines American, Delta and Northwest pulled back on a sizeable portion of their recent $5 one-way increase. The move by these key carriers comes on the heels of a United Airlines roll back that took place on Friday. This leaves Continental Airlines as the only airline that is maintaining the $5 one-way fuel surcharge. Continental started the increase on Monday, May 14th.

The chart below shows the number of increases that remain from the initial ones that took place on May 3rd, 10th, and 14th. The increases focus on the top 1,200 U.S. and Canadian city pairs shown by advance purchase bucket.

There have been 7 attempted increases so far in 2007, but the last 17 days have been particularly volatile, as shown in the increase timeline below:

Delta, American, and United have matched the $5 increase that Continental initiated on Monday evening. Generally, airlines take a longer time to respond to fuel charges than to traditional fare increases, because their systems are not set up to automatically track fuel surcharges. For consumers, a fuel surcharge and a general fare increase aren’t any different, as both directly affect the cost of airfare. In this case, consumers will see an increase of $5 each direction.

Americans increase will affect 447 of 1,200 top city pairs.
Deltas increase will affect 847 of 1,200 top city pairs
Uniteds increase will affect 613 of 1,200 top city pairs

Continental Airlines took an unexpected step today when it issued its own set of $5 each-way increases after pulling back on recent increases earlier this afternoon. This means that we’re basically looking at concurrent fare increases, with Continental’s new round coming just days after Delta’s May 10th increase. As the Delta increase continues to be reduced, Continentals will begin to affect 762 of the top 1,200 city pairs in the U.S. and Canada. The increase is applicable to walk-up, 3-day, 7-day, 14-day and 21-day airfares.

Continental initiated a $5 increase less than two weeks ago on May 3rd. Today’s airfare increase marks the seventh system-wide attempt in 2007. Each of these attempts has seen mild success, due in large part to the fact that Southwest Airlines and other low cost airlines has not participated.

Below is a graph showing the path of both the recent Delta increase and the beginning of the latest Continental increase.

Even with these recent increases, airfare is about 14% below what it was at this time last year. However, with peak summer travels approaching rapidly, airfare increases are a common occurrence.

In this mornings 10:00am U.S. domestic airfare feed, US Airways rolled back its $5 each way increase in Southwest Airlines overlap city pairs. American and United also rolled back more of their fare increases.

For the moment, Continental has not rolled back any of its increases.

Below is a graph with the most recent status of this latest increase attempt. US Airways and American are now at 20%, meaning that their respective increases apply to 20% of the top 1,200 city pairs:

Northwest Airlines is the latest to join the $5 each direction increase started by Delta on 10-May.

Northwests increase will affect 632 of the top 1,200 city pairs. While the last round of increases (started by Continental on 3-May) saw Northwest match in only 20% of the top city pairs, the latest increase has Northwest matching in 50% of the top city pairs. The added response by Northwest will give the increase additional support, and make it easier for the increase to stick.

United Airlines and code share partner US Airways have joined Deltas $5 each way increase, affecting 748 of the top 1,200 city pairs and 773 of the top 1,200 city pairs in that order. Northwest has not joined in on this particular round of increases.

American Airlines has matched the $5 each-way increase initiated by Delta Thursday evening. Travelers in 659 of the top 1,200 city pairs will be affected by this most recent American’s increase. Other airlines will most likely match in the forth coming airfare feeds.

This evening Delta filed a system-wide $5 increase on one-way airfares. The increase affects 767 of the top 1,200 city pairs, and it applies to walk-up, 3-day, 7-day, 14-day and 21-day airfares.

This marks Delta’s sixth attempt at a system-wide increase by the legacy airlines in 2007. The previous five attempted increases have suffered from a lack of participation on the part of Southwest and other low-cost airlines.

Domestic fares are 10% lower than they were at this time last year, and 13% lower than at the same point in 2005. Fare increases such as these are typical when heading into the high travel season.