Airline Fares to Rise ...

U.S. airlines, bruised by higher fuel prices, are stepping up efforts to raise fares and increase fees to avoid a third straight year of declining profits.
“Carriers have struggled to keep pace with the rising cost of fuel, among many others,” John Heimlich, chief economist of trade group Airlines for America, told reporters on a conference call last week. “I can assure you carriers are looking at every aspect of their revenue arsenals and cost elements to try to right the ship.”
Such initiatives are increasingly apparent as the summer travel season ends.
Southwest Airlines is charging more for early boarding on some flights. JetBlue Airways became the first major U.S. carrier to raise fees on the first checked bag to $30, and United Airlines quickly followed its lead. Business fares climbed 8 percent last week from a year earlier, even as ticket prices for leisure travel were little changed, said Susan Donofrio, a Macquarie Group analyst.


“Airlines are going to start targeting ancillary revenue, the baggage fees and all the other stuff, along with base fare increases as we head into the fall,” Donofrio said in an interview.
Investors have been betting that the push will bear fruit after dumping airline shares during the first half of the year. A Standard & Poor’s index of the five biggest U.S. airlines extended gains in August after jumping 11 percent in July, the biggest monthly gain since late 2016.
The industry’s annual profit peaked in 2015 and is headed for a third straight decline this year, according to Airlines for America, which represents companies such as American Airlines and United Continental Holdings.
The two other big U.S. carriers — American and Delta Air Lines — are likely to follow JetBlue and United in raising checked-bag fees, said Jay Sorensen, president of IdeaWorks.
“I would not be surprised to see that, in the course of the next week,” Sorensen said.