NEW YORK (Reuters) - Southwest Airlines Co. (LUV.N) said on Monday it raised fares up to $2 each way on some of its flights, a move that was matched by competitors.
The fare hike marks the second increase by Southwest this year, and shows that airlines still have some ability to raise fares on domestic routes, despite recent concerns about surplus capacity.
U.S. airlines are trying to extend last year’s series of revenue-boosting fare increases. Fare hikes fail if they are not broadly matched.
Southwest is raising fares by $1 on flights under 250 miles as well as flights out of its home base in Dallas. Flights between 250 miles and 750 miles are being increased by $2 each way, spokeswoman Beth Harbin said.
The increase affects about 25 percent of Southwest’s flights.
Other airlines, including No. 1 U.S. airline American Airlines, a unit of AMR Corp. AMR.N, matched the increase in overlap markets.
“Network carriers have tried to raise prices system-wide four times this year with limited success, in large measure due to the lack of participation by Southwest,” said Farecompare fare analyst Neil Bainton, in a research report.
“With Southwest leading this increase, it is very likely it will stick,” he said.