US airlines raise fares, say Ebola has not hurt bookings

Major US airlines have raised domestic one-way fares by US$2 on average since Thursday, marking the first industry wide increase in half a year. Delta, American and United have said that macroeconomic concerns such as Ebola have not impacted their bo
Major US airlines have raised domestic one-way fares by US$2 on average since Thursday, marking the first industry wide increase in half a year. Delta, American and United have said that macroeconomic concerns such as Ebola have not impacted their bookings. -- PHOTO: REUTERS 

NEW YORK (Reuters) - Major US airlines have raised domestic one-way fares by US$2 on average since Thursday, marking the first industry wide increase in half a year..

The hikes suggest that airlines do not intend to pass along savings from the decline in jet fuel prices to their customers.

The news may quell investors' concern that airline revenue will fall if the Ebola virus discourages people from traveling, and the stocks of Delta Air Lines, American Airlines and United Airlines rose on average more than 5 per cent on Monday, nearly recouping a month of stock losses.

On Thursday afternoon, JetBlue Airways raised fares US$2 across its entire domestic network and Puerto Rico, according to spokesman Morgan Johnston.

Delta followed with a similar raise that night, and on Friday, Southwest Airlines, United and American all followed suit, according to spokesmen from each airline. "We matched an industry increase and expanded it to additional markets," Delta spokesman Anthony Black said.

"Look no further than today's domestic fares structure for supporting evidence of our view that shareholders are the disproportionate beneficiaries of lower jet fuel prices," JPMorgan analyst Jamie Baker wrote in a research note Monday.

Baker said airlines' revenue per available seat mile may still fall with a slump in global economic demand, which has contributed to the slide in crude oil prices. "That's different than airlines reaching a conscious decision to hand over savings directly to passengers," he wrote.

Delta, American and United have said that macroeconomic concerns such as Ebola have not impacted their bookings.