Airlines raise U.S. fares despite cheaper fuel

Several major U.S. airlines hiked fares last week, signaling that lower oil prices aren't necessarily being passed on to fliers, and Ebola fears are not quashing the demand to fly, according to an analysis by a fare-watching site.

Rick Seaney, of FareCompare.com., says that fares rose up to $4 round trip on many domestic flights. United, Delta, American and US Airways confirmed that they matched an industry-wide fare increase of $2 one way, or $4 round trip. Southwest said it also increased one-way fares by $2 on some domestic markets on Friday afternoon.

Often when airlines boost fares, they say it's to help them deal with higher costs, particularly for fuel. But oil prices have steadily dipped in recent weeks, dropping to $81.94 a barrel as of late Monday afternoon.

Additionally, an Ebola outbreak that has killed thousands of people in West Africa, and led to the death of a Liberian man visiting Dallas and the infection of two health care workers, has sent airline stocks tumbling amid questions about whether people would be too frightened to fly. But airlines, backed up by some traveler surveys, have said demand has not diminished.

"Ebola fears do not appear to be hurting demand for flights and the news about the end of the quarantine period for dozens of Texans with no new infections may continue to calm lingering fears,'' Seaney said in a statement. And "savings on jet fuel from recent oil price drops are not being passed along to passengers.''

In an investor's note, Jamie Baker of JPMorgan said the price hike "represents the industry's first successful system-wide domestic fare increase since April, and comes in spite of fuel's recent, precipitous decline. Evidence of domestic fare traction can hopefully allay investor concerns that lower fuel prices will simply be handed over to passengers in the form of lower fares.''

This most recent price increase was only the fifth successful fare hike this year, though airlines have tried to boost fares 20 times since January, according to Seaney's analysis. Three of those attempts occurred in October.

There are likely several reasons so few hikes have succeeded, Seaney says.

Airlines may still be reluctant to match a fare increase since pushing consumers too far could lead more of them to forgo flying, Seaney says. Carriers also don't want to be seen charging more on a route than low-cost carrier Southwest. And to make sure planes continue to fly full, "filling empty middle seats requires discounting, especially on low demand days,'' Seaney says.

There were a dozen attempts to raise fares in 2013. Only three were successful, Seaney says.