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Consumer

With Thousands Stranded Across the U.S., Airlines Raise Prices

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(AP)

(AP)

DougSovern20100908_KCBS_0208r Doug Sovern
Doug began his career as a copy boy at the New York Times, and then...
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SAN FRANCISCO (KCBS) – The major American airlines are adding insult to injury, raising fares even while thousands of stranded passengers struggle to get home after last weekend’s big blizzard. Alex Harris has been stuck in California all week, trying to get home to the snowy East Coast.

“My first flight got canceled and transferred and then my second flight got canceled and we had to do another transfer, and our actual ticket for our new flight is double-booked,” said Harris.

KCBS’ Doug Sovern Reports:


Welcome to the not-so-friendly skies of 2010. Fordham University Professor of Finance and Business Economics Frank Werner tells KCBS, there’s simply no room on the scaled-back number of flights to accommodate passengers bumped by blizzards.

“The legacy airlines have found that the only way that they can compete successfully with the localized carriers is to drastically reduce their costs, and one way they’re doing that is by eliminating excess capacity, and I don’t see that changing at all,” said Werner.

Another way is to raise fares, again, 20 dollars per round trip effective immediately on United, Continental, Delta and American. And another increase is expected to follow.

“You’re not going to see fares going up again very quickly, but they may very well go up again if the economy recovers soundly by the end of the year,” said Werner.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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