This evening in the 5:00pm EDT airfare distribution feed, FareCompare.coms airfare processing system, continues to note significant matching activity related to the attempted increase by Delta Airlines Thursday night of $5 one-way ($10 roundtrip).

American Airlines, United Airlines and US Airways began matching Friday evening and this evening Northwest Airlines jumped in with a full system wide match and Continental Airlines dipped its toe in the water by matching about 33% of the increase.

United Airlines, on the other hand, after completely matching Friday evening rolled back 20% of that matching activity.

This leaves the following matching statistics:

• United Airlines 80%
• Continental Airlines 33%
• American Airlines 55%
• Northwest Airlines 100%
• US Airways 50%

There is one more airfare distribution remaining where continued matching or rollback activity may occur:

• 5:00pm EDT Sunday

More jockeying of prices is likely to occur Sunday evening and even possibly through Monday and Tuesday.

This evening in the 8:00pm EDT airfare distribution feed, FareCompare.coms airfare processing system, notes significant matching activity related to the attempted increase by Delta Airlines Thursday night of $5 one-way ($10 roundtrip). American Airlines, United Airlines and US Airways all show major matching movement. Northwest Airlines and Continental Airlines show no matching activity.

Interestingly both American Airlines and US Airways only partially matched the Delta increase (with only about a 50% overlap). United Airlines, however, completely matched the system wide increase.

There are only two more airfare distributions remaining where Northwest and Continental have the option of matching before the end of the weekend.

• 5:00pm EDT Saturday
• 5:00pm EDT Sunday

A quick comparison of the cheapest average airfare price from last year at this same time period (September 2006) shows that the current prices on the six major legacy airlines are creeping up to the same levels as last year.

Day to day competitive pressures drive prices down and incremental system wide increases provide offset to this constant downward pressure.

Up until this past week the cheapest average airline ticket prices have trended down in 2007 mainly due to the series of increase attempts in 2006 which stuck. In 2007 increase attempts had been less successful than 2006, but with the recent Southwest Airlines Increase (with matching) and Delta Air Lines Increase (with matching) the price points are nearing those of 2006.

For example, the following graph shows a side by side comparison of the cheapest average price between the top 50 cities (selected by passenger traffic) for the past month compared with the same time period in 2006 on United Airlines.

I will send out update notes over the weekend if any matching activity occurs.

Friday September 7, 2006 12:30pm CDT

In the 12:30pm EDT airfare distribution, FareCompare.coms proprietary airfare processing system notes that ALL major legacy airlines continue to sit on the sidelines with NO matching of the $5 one-way ($10 roundtrip) airfare increase initiated by Delta Air Lines late Thursday evening.

There are only three airfare distributions remaining where the legacy airlines have the option of matching before the end of the weekend.

• 8:00pm EDT this evening
• 5:00pm EDT Saturday
• 5:00pm EDT Sunday

Also in the this 12:30pm EDT airfare distribution, Air Canada rolled back its system wide increase for travel between the U.S. and Canada from last week. The rollback was quickly matched by United Airlines and should be fully rolled back on other major airlines later this evening.

I will send out a note after the 8:00pm EDT airfare distribution with another update on matching and/or rollback activity.

Friday September 7, 2006 11:00am CDT

In the 10:00am EDT airfare distribution, there was no matching by any airlines of the Delta Air Lines airfare increase.

The next airfare distribution will occur at 12:30 EDT. I will send out an update on matching or rollback activity at that time.

This evening in the 8:00pm EDT domestic airfare distribution, FareCompare.coms proprietary airfare processing software noted that Delta Air Lines filed a system wide airfare increase of $5 one-way ($10 roundtrip).

This price increase occurs on the heels of a Southwest Airlines increase late last week — which was matched by the major legacy airlines over this past Labor Day weekend.

This increase is broad based encompassing both leisure airfares (14 day advance purchase requirement) and business airfares (less that 14 day advance purchase).

A breakdown of city pairs with this $5 one-way increase ($10 roundtrip) by advance purchase follows:

• 0 Day Advance Purchase 20,953 city pairs
• 3 Day Advance Purchase 12,882 city pairs
• 7 Day Advance Purchase 18,002 city pairs
• 14 Day Advance Purchase 16,349 city pairs
• 21 Day Advance Purchase 10, 391 city pairs

The matching activity of other major airlines will dictate whether or not this attempted increase will significantly hold.

Early this year Southwest Airlines foiled several attempts at increases by the major legacy airlines by not tagging along. However, later at the start of summer the major legacy airlines were able to get a handful of increases to stick even without the cooperation of Southwest Airlines.

It is unusual to see attempted increases in this traditionally slower travel period between the start of school and Thanksgiving. This time period historically has been filled with sales (not increases), which has held true this year with several airfare sales in the past month.

We will track the matching activity of this increase throughout the day tomorrow. The next airfare distribution occurs at 10:00am EDT.

Tuesday, September 4th 2007 2:30pm CDT

Over this past Labor-Day weekend the major domestic airlines began matching an airfare increase that overlaps with Southwest Airlines routes, indicating that Southwest initiated an increase late last week.

The increase is mileage based with one-way airfare increases of:

$1 for one-way trips less than 500 miles
$3 for one-way trips less between 500 and 1000 miles
$5 for one-way trips between 1000 and 1250 miles
$5 and $10 for one-way trips over 1250 miles

As a frame of reference Chicago to Los Angeles is approximately 1757 miles.

The increase includes both business (less than 14 days advance purchase) and leisure airfares.

This increase looks to be very specific to Southwest Airlines routes and is about 5-18% (depending on the airline) the magnitude of a normal system wide airfare increase.

FareCompare.com began to track this very unusual fall increase activity on Saturday September 1st where American Airlines, United Airlines and US Airways had significant airfare increase activity based on trip mileage.

On Sunday, September 2nd Continental Airlines and Northwest joined in the matching. Delta had very minor increase matching activity — most likely a reaction to competing airline increases from Saturday.

Monday, September 3rd saw continued matching activity by the major airlines (except Delta). Frontier Airlines and Alaska Airlines joined into the matching activity as well.

Today as of the 12:30pm EDT airfare feed, only Delta has continued some matching as it trailed significantly behind the other major airlines weekend activity.

The past few months have seen several targeted airfare sales, both domestic and international which have followed a normal historical airfare sale pattern for the typically slow travel period between late August and mid-November.

It is quite unusual to see an airfare increase at this time of year, and it will be interesting to see the final outcome of this particular increase as matching activity begins to subside. It would be quite unusual for a roll back to occur on an increase initiated by Southwest Airlines.

Regards,

Rick Seaney
CEO, FareCompare.com

This evening in the 8pm EDT Domestic U.S./Canada airfare feed, Delta Air Lines filed an airfare sale for departures between August 14, 2007 and October 16, 2007.

The newly filed airfares require a 21 day advance purchase before departure all days of the week. Tickets must be purchased by August 9^th.

The average decrease in price is $73 below the current lowest published Delta airfare in over 6,000 city pairs. The seat inventory for these airfares is in the Deltas deep discount T class where seats are usually limited in quantity.

Traditionally most airlines file airfare sales for the softer travel time period between late August and mid November. However, with the highest demand in history this summer, it was not clear cut that these traditional airfare sales would occur this year.

This airfare sale signifies what should be the first of several airlines matching for fall travel departures are associated wit the time period after children are back in school and before demand increases for Thanksgiving and end of year holiday season travel.

Example city pairs with these now low airfares include:

Phoenix to Toronto: $290+tax

Nashville to Raleigh-Durham $118+tax

Given the wave of attempted airfare increases in the past 4 weeks by several airlines; FareCompare.com has decided to review these increases to see just how sticky they were.

We decided the best way to do this was to intersect the airfare increase information with non-stop flight schedules. To this end:

• We pulled all the non-stop flights within/between the U.S. and Canada for Friday 20-July for each airline and totaled the number of seats flown (Fridays are typically the busiest travel day).
• We also pulled all non-stop airfares that had a price increase of at least $10 roundtrip ($5 one-way) since June 20^th (the day before the first wave of recent attempted airfare increases)
• We intersected these 2 sets of data to compute the number of seats flown which had at least $10 roundtrip increase ($5 one-way)
• We did not attempt to analyze connecting airfare markets; this report is solely based on all non-stop seats flown on a typical day within/between U.S & Canada.

The analysis showed three groupings of airfare increases $10, $20, & $30 roundtrip ($5, $10, & $15 one-way).

The following chart shows the percentage of seats flown with at least a $10 roundtrip increase since 20-June on each airline broken down by advance purchase (number of days required before departure).

A few interesting notes about this data:

• Airlines which initiated increases had more luck keeping it sticky
• It was difficult for the airlines to maintain attempted increases on leisure airfares (14 days advance purchase and higher) and much easier on business fares (less than 14 days advance purchase)
• Northwest was the only major airline which did not have any significant stickiness
• Surprisingly US Airways which was a late matching entrant is currently the leader on increases
• Delta was the strongest behind US Airways on maintaining the increase
• Jet Blue was able to sneak in late and get some increases after not participating initially
• United had a surprising number of $30 roundtrip increases, suggesting they either have little competition on some routes or did not yield as much to competitive pressure
• Lastly, the big question: Can airfare increase be called sticky if they only stick in 20-30% of all non-stop seats flown and only for business travel?

* Note: All data is relative to a single day of all non-stops seats flown that day

This morning in the 10:00am EDT airfare feed US Airways initiated a system wide increase of $1, $3 & $5 each way.

This increase follows hot on the heels of a Southwest airlines increase of $1, $3, $5 & $10 each way, matched by all major airlines over the weekend except US Airways.

We track the Southwest increases through matching activity of the major airlines in overlapping Southwest flight routes. It should be noted the $10 each way increase on matching airlines was only on walkup (0 day advance purchase) airfares and not across the board (so the Southwest $10 each way increase is likely only on walkup fares).

It is highly unusual for a major airline to initiate a system wide increase (US Airways) on a Monday. Most increases occur on Thursday evening giving the other major airlines a chance to match over the weekend.

Historically airfare sales begin to occur in August for travel departing in late August through mid November which is normally a softer travel time period. The airlines willingness to maintain increases at this point may point to a change in this historical pattern of slower travel during this time period.

The history of this weekends airfare increase activity is shown below:

A rollup of the last 2 weeks of increases shows that for the most part both rounds of increases did indeed stick with some notable exceptions:

• Low cost airline overlap markets. Southwest, JetBlue & AirTran did not match either of the two increases
• Smaller markets that were not as important to a particular airlines market share

The following report shows a comparison of the increase for the past 2 weeks from Wednesday June 20^th 8:00pm EDT (the day before the first increase) and today at 12:30pm EDT.

The information is categorized by advance purchase (number of days required before departure for purchase today) and the percentage of total markets where the price has risen by $20 roundtrip ($10 one-way) or only $10 roundtrip ($5 one-way).

Note: The $4 roundtrip Continental and Northwest fuel surcharge increase for this comparison was removed. Empty columns reflect no significant data to report.

To more accurately reflect the stickiness of increases and/or decreases, starting next week we will begin a weekly rollup that uses flight schedules to further refine and filter the airfare information.