Categorized | Airlines

Southwest hikes prices on business travelers…

Posted on 12 September 2011

Southwest Airlines Co. said Friday it matched other airlines in raising prices on tickets favored by business travelers.

 

Southwest’s action virtually ensured that the increase of $6 to $10 per round trip will stick. The increase applies to last-minute tickets often purchased by corporate travelers.

 

The airlines left prices unchanged on advance-purchase tickets used more often by leisure travelers.

 

Jaime Baker, an analyst with J.P. Morgan who tracks fares, said Southwest was the last and most important major airline to go along with the increase on business travelers. If Southwest — the nation’s largest discount airline and a price-setter on many routes — had balked, it could have forced other airlines to roll back the increase.

 

US Airways, Delta, United and Continental confirmed that they raised prices this week, indicating that the airlines are confident about business-travel demand heading into the fall.

 

This week, United Continental Holdings Inc., US Airways Group Inc. and Southwest reported that an important revenue ratio rose between 6 to 11 percent last month compared with August 2010. That was thanks to full planes and about 10 broad price increases this year.

 

Baker said the August revenue numbers indicate that demand for corporate travel hasn’t slowed down despite the weak economy. But he predicted that business travel will weaken in the fourth quarter.

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