Last week, Delta kicked off a chain reaction with a small domestic ticket price-hike (it was just a few dollars per round-trip). Other airlines quickly joined in, including American, United, JetBlue and others.
Since then, airlines have been adjusting some prices while rolling back others and at the moment it’s not clear if the hike will succeed. But even if the hike fails, rest assured the airlines will try again. And again.
Raising prices may sound crazy considering how cheap oil is (about $100 less than the per barrel price of last summer); shouldn’t airlines be dropping fares?
They’re not because demand remains fairly strong, which means passengers are perfectly willing to pay current prices.
But what the airlines really want to know is, will they pay more?
This question gets asked during an ongoing process I call probing. At its simplest, probing tests the limits of shoppers’ wallets by raising fares and seeing if they still get any bites; if no one buys, or not enough do, fares roll back.
This probing is played out year after year. 2014 saw 21 price hike attempts though only five were successful. From a consumer point of view, these weren’t staggering hikes, typically ranging in price from $4 to $10 per round-trip flight. But it all adds up, and from an airline point of view, a few successes are worth endless probing. Here’s what we saw in other years:
–2013: 12 attempts, 3 successes
–2012: 15 attempts, 7 successes
–2011: 22 attempts, 9 successes
What consumers can do? Probing for hikes often begins toward the end of the week. The most recent fare hike began last Thursday, typically the last day of an airline sale, so consumers who buy tickets in the middle of the week avoid the higher prices of week’s end.
If you do buy during a pricey probing period, remember that consumers have 24 hours to change their mind. Either purchase then cancel flights on most airlines thereby avoiding the expensive reservation change fee, or hold tickets on American and forgo the purchase within 24 hours.
Bottom line: Probing is one instance where travelers have the last word to some degree; if they balk at paying higher prices – or a major airline declines to join a hike – prices come tumbling down again.
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