Increase in Fares Mounts Airline shares
Following the news on Friday about five major carriers increasing the air fare, the shares of U. S. airlines increased. The fare rise was not shown by low-cost carriers.
Rick Seaney, Chief Executive of FareCompare. com said, “Continental Airlines and Delta Air Lines matched a $10 round-trip air-fare hike Friday that was initiated by UAL Corp's United Airlines on Wednesday night, according to American Airlines, a unit of AMR Corp, and US Airways also lifted prices on Thursday”.
Greater traffic and a growing demand especially from profitable business travelers was reported in recent weeks by the airline industry. After earlier punching a year-high of $6.91, US Airways climbed more than 6% to $6.73 on the New York Stock Exchange.
An increase of 4% or 77 cents, to $19.63 in continental shares in afternoon trading was recorded and Delta shares increased 3% to $12.18. On Nasdaq, united shares were up 1% to $15.83 and reached a year-high of $15.98.
According to the U. S. Department of Transportation’s Air Travel Consumer Report Delta Air Lines ranked in the middle of the pack for on-time arrivals in 2009, but Comair was almost last. As stated by the report, 78.6% of on-time arrival rate was recorded for Delta in 2009 ranking it 12th of 19 airlines for the full year. With an on-time arrival rate of 69%, Comair was ranked last where as an average of US came out to be 79.5%.