Airlines Hit Ceiling in March Traffic

Most U.S. Airlines thought they found the magical formula: Increase fares, reduce capacity, and charge for everything you can imagine under the sun.  This formula worked so well that all U.S. airline stocks reached multi-year new highs in March.

Then April arrived and the airlines looked back at their head-scratching numbers for the month of March, and started issuing cautious assessments due to softness of demand.  The truth is that the discretionary traveler has started showing resistance to the multiple price increases, surcharges and extra fees.  As a result, airlines such as Delta, Southwest and U.S. Airways have revised their forecasts down.  There is certainly a sudden realization that fares and fees cannot keep marching up.  Discounts have become more scarce thanks to Southwest which appears to now march to the same beat as legacy carriers.  Expect the airlines to react to all this data by announcing "late spring sale" and "summer sale" that will extend to fall. www.premieretravel.com