This afternoon in the 5:00pm EDT airfare feed Northwest Airlines & US Airways, joined American, Delta and Continental in matching the increase initiated by United on Thursday night.

Heightened security in the wake of the Glasgow airport attack will continue to strain the already overloaded U.S. air travel system and is likely to cause even more frustration to the heartiest of air travelers who have experienced a series of customer service gaffs and snafus in the recent past. It will be interesting to see if this second increase can stick in this highly charged environment.

This morning at in the 10:00am EDT airfare feed, United Airlines initiated a $5 one-way increase. This is on the heals of a similar increase initiated by Delta last week which has stuck for the most part with all major airlines.

It is unusual for increases to be initiated on Friday morning; most increases are initiated Thursday nights at 8:00pm which go in effect after midnight.

A quick glance at walkup-fares (0 day advance purchase) shows that for the 23,600 markets (city pairs) where United files walkup fares, a 5$ one-way increase from 8:00pm last night to this mornings 10:00am feed occurred on 15,549 or 65%. Similar increases occur on all advance purchase days (3, 7, 10, 14, 21 and 30) covering both business and leisure fares.

Note: United files fares in markets they dont necessarily fly. Exact information on airlines including flight schedule, hub and non-stop overlay with airfares can be requested separately.

Tonight in the 8:00pm EDT airfare feed American, Continental & Delta match the new $5 one-way increase initiated by United at 10:00am this morning.

Continental raises fares by $3 one-way to add to is $2 fuel increase from Thursday to match.

The Continental fuel surcharge currently shows an end date of August 20^th for departures. Late August is typical for price breaks as the peak summer demand subsides as school begins to restart.

It is pretty obvious that the major airlines are feeling comfortable enough to try increases even though the lower cost airlines are not cooperating. If this increase sticks, many consumers will be paying $20 more than they were 2 weeks ago for the similar tickets. Weather delays, customer service dissatisfaction, highly publicized recent travel horror stories and packed planes have many air travelers on edge, it will be interesting to see if and when consumers begin to push back.

FareCompare.com has pulled the system-wide published airfares (normally a top subset for reporting this alert reporting) for the domestic U.S. and Canada from the 8:00pm EDT Wednesday June-20 airfare feed (evening before the increase) and the 8:00pm EDT Thursday 28-June (this evening) and compiled the following final report.

This report shows the percentage of markets that have a $5 one-way or more increase this evening as compared to Wednesday evening last week.

The breakdown is by Advance Purchase within airline. 7 days or less advance purchase is considered a business fare, more than 7 days advance purchase is considered leisure.

Market is a city pair. Not all airlines file fares in each advance purchase category.

Overlay of flight schedules, non-stops and per carrier top markets may be requested separately.

The increase has for the most part has been successful. The exception is highly competitive markets (especially those that overlap with lower cost airlines).

Tonight, Continental Airlines increased Domestic fuel surcharges by $1.86 one-way (2$ one-way with the 7.5% U.S sales tax). This is on the heals of matching Deltas $5 one-way airfare increase initiated last Thursday night.

Fuel surcharges are added on domestic airfares using the Surcharge Rule which is one of the 20+ rules on each airfare. Consumers will see a $4 increase. Continental will only pocket $1.86 one-way (the U.S government the other $.14).

A few interesting notes about this fuel surcharge increase:

• The fuel surcharge is only charged for travel departing on/before 20-August-2007 (most purchases for domestic are less than 45 days in the future)
• Continental was testing their fuel surcharge filing last Thursday (21-June) at mid-day before Delta initiated a system-wide base airfare increase that evening (Continental raised surcharges $4.65 one-way mid-day). Continental subsequently rolled their fuel surcharge increase back the next Friday opting to increase base airfares in its place to match Delta where they pocket the entire consumer increase (instead of 92.5% of the consumer increase due to U.S. sales tax)

Note: Due to competitive nature of each market airlines do not always have 3, 7, 14, 21 day advance purchase airfares in all markets

Analysis of the 8:00pm EDT 26-June and 10:00am EDT 27-June airfare feeds show:

American Airlines

• Rollback of an additional 3.5% (rollback total of 59.5% to date)

Continental

• Rollback of an additional 6% (rollback total of 52% to date)

Delta

• Rollback of an additional 2.5% (rollback total of 25.5% to date)

Northwest

• Rollback of an additional 1.5% (rollback total of 45.5% to date)

United

• Rolled back an additional 18.5% (rollback total of 42.5% to date)

US Airways

• Rolled back an additional 7.5% (rollback total of 19.5% to date)

The original increase from last week is settling in with rollbacks based on competitive market pressures to stay at equilibrium on pricing.

We will be sending out a special report later this afternoon with up to date effects of this increase in smaller markets, major markets and non-stop markets for each airline.

If you would like this special report please send me a note at mailto:rick.seaney@farecompare.com

Regards,

Rick Seaney
CEO, FareCompare.com
(office) +1 972 755 1058 x218

Glossary

Analysis of the 10:00am EDT airfare feed shows:

American Airlines

• No Change (rollback total of 52% to date)

Continental

• Rolled back an additional 3.5% (rollback total of 46% to date)

Delta

• Increased an additional 436 markets by 5$ one-way
• Also rolled back an additional 1.5% (new adjusted rollback total of 23% to date)

Northwest

• Rolled back an additional 10% (rollback total of 44% to date)

United

• Rolled back an additional 1% (rollback total of 12.5% to date)

US Airways

• No change (rollback total of 5% to date)

Delta was the lone airline with continued increases.

Northwest was the only airline significant rollback decreases of 10%.

Other airlines had minor changes reflecting realignment and reaction to competitive markets and lower cost airlines.

Glossary

Analysis of the 8:00pm EDT airfare feed shows:

American Airlines

• Rolled back an additional 2% (rollback total of 52% to date)

Continental

• Rolled back an additional 2% (temporary rollback total of 58% to date)
• Increased an additional 2386 markets by $5 one-way (new total of 8946 markets increased) (generates a new rollback grand total of 42.5% to date)

Delta

• Rolled back an additional 21.5% (rollback total of 23.5% to date)

Northwest

• Rolled back an additional 11% (rollback total of 34% to date)

United

• No Activity (rollback total of 11.5% to date)

US Airways

• Roll back 5% of their increase (rollback total of 5% to date)

For the most part the last weeks fare increase is sticking. Competitive pressures have forced several market re-alignments during the day.

Continental actually increased this feed by $5 each way in several markets negating some of its earlier pullbacks. Delta pulled back a significant portion for the first time since its original increase. The increase and rollback activity is still highly volatile and has not calmed down enough to accurately predict a final outcome of the attempted increase.

Glossary

Analysis of the 12:30pm EDT airfare feed shows:

American Airlines

• Rolled back an additional 13% (rollback total of 50% today)
• Majority of rollback was business fares (7 day advance purchase or less)

Continental

• Rolled back an additional 2% (rollback total of 56% today)
• Majority of rollback was business fares (7 day advance purchase or less)

Delta

• Minimally rolled back by 2% Thursdays increase (rollback total of 2% today)
• Rolled back 50% of the 1,974 markets they increased at 10:00am today

Northwest

• Minimal roll back activity (rollback total of 23% today)

United

• Rolled back 9% of Fridays increase (rollback total of 11.5% today)

US Airways

• No Increase or Rollback Activity (no rollback activity today)

To this point Delta & US Airways are holding firm on the increase. Northwest and United have rolled back partially (23% and 11.5% respectively). American and Continental have rolled back at least half of their original increases.

Glossary

Analysis of the 10:00am EDT airfare feed shows:

American Airlines

• Rolled back 37% of their increase on Friday
• Rollback was predominantly on business fares (7 day advance purchase or less)

Continental

• Rolled back 54% of their increase on Friday
• Rollback was predominantly on business fares (7 day advance purchase or less)

Delta

• Last night (Sunday) they rolled back 10% of their increase on Thursday
• At 10:00am EDT today, Delta increased 1974 markets by 5$ one-way (none of these markets overlapped the original increase or partial rollback)
• No Rollbacks in this feed

Northwest

• Rolled back 23% of their increase on Saturday
• Rollback was a combination of business and leisure fares
• 300 markets had a reduction in price of $5 one-way that were not part of their original increase

United

• Minor (less than 3%) competitive rollback activity

US Airways

• No Activity

Midwest Airlines

• Increase 1153 markets (297 major markets, 50% of their non-stop routes) by $5 one-way

The increase will not completely survive, but with Deltas increases this morning it is unclear how those that partially rolled back will react.

Glossary