US: Get ready for higher fares and fees to jolt sagging airline profits
US 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 Airlines for America, a trade group, said Wednesday. “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 winds down. Southwest is charging more for early boarding on some flights. JetBlue Airways became the first major US carrier to raise fees on the first checked bag to $30. Business fares climbed 8% this 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. Investors have been betting that the push will bear fruit after dumping airline shares during H1. A Standard & Poor’s index of the five biggest US airlines has extended gains in August after jumping 11% in July, the biggest monthly gain since late 2016. The gauge was little changed Wednesday.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2018-08-30/general/us-get-ready-for-higher-fares-and-fees-to-jolt-sagging-airline-profits
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US: Get ready for higher fares and fees to jolt sagging airline profits
US 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 Airlines for America, a trade group, said Wednesday. “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 winds down. Southwest is charging more for early boarding on some flights. JetBlue Airways became the first major US carrier to raise fees on the first checked bag to $30. Business fares climbed 8% this 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. Investors have been betting that the push will bear fruit after dumping airline shares during H1. A Standard & Poor’s index of the five biggest US airlines has extended gains in August after jumping 11% in July, the biggest monthly gain since late 2016. The gauge was little changed Wednesday.<br/>
