Northwest Airlines Sets $80 Roundtrip Fare Hike

Airfare monitoring website FareCompare.com reported that Northwest Airlines upped its domestic fares by nearly $80 roundtrip in over 4,000 city pairs for both business and leisure travelers.

The increase came after nearly a month of no airfare hikes. But Rick Seaney, CEO of FareCompare, said that fares may finally be topping out, due to a sluggish economy and the fact that oil is down, relatively speaking, to the mid-$120s per barrel. He said revenue from added fees is also kicking in.

But this particular airfare increase is noteworthy, he said, in that Northwest has not initiated any of the previous 21 attempted hikes of 2008 and has been habitually last to match the previous 15 successful hikes this year (success defined as all six legacy airlines matching on two-thirds of their respective route systems).

According to Seaney, a quick check of Northwest hub cities shows significant airfare increase activity in Detroit with hardly any hike activity in Minneapolis or Memphis.

Seaney also pointed out comments made by Gary Kelly CEO Southwest Airlines, in which Kelly said that there was some evidence that Southwest’s competitors may feel that they’ve pushed fares too fast, causing demand to drop, which has resulted in have to reduce fleets and lay off employees.