You may recall that in an earlier post, Do Airline Woes Signal Possible Fare Wars?, I predicted that we might soon see fare wars breaking out, despite fuel cost pressures on the airlines.
The first cracks in the wall have emerged in the past week as first Northwest, and then others, abandoned efforts to institute a $40 to $20 fuel surcharge. In the past, Northwest has frequently been the airline that breaks ranks on attempts to institute and maintain price increases.
So even as airlines struggle to achieve or maintain profitability in the wake of increasing fuel costs, I still suspect someone is going to start a fare war soon in an attempt to grab market share. Of course, since such moves are typically matched by competitors, it’s a self-defeating strategy, but it’s still one that some airlines fall back on in hard times.
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