US airlines try and fail to increase fares as fuel costs jump

Atlanta

US airlines are asking shareholders to believe they can raise ticket prices while ramping up the supply of seats. To Wall Street, that sounds like a fairy tale. Six attempts at broad-based fare increases have failed in the last two months, most recently a bid by Delta Air Lines Inc.

The last successful widespread price hike was Oct 10, said JPMorgan Chase & Co analyst Jamie Baker, even as oil prices rebounded from a three-year slump.

That's creating a confidence crisis for investors, who last month sent airlines to the biggest drop since 2015 when United Continental Holdings Inc announced an aggressive expansion plan.

The No 3 US carrier is hardly alone. Southwest Airlines Co, JetBlue Airways Corp and Alaska Air Group Inc are also planning to grow faster than the economy. The worry is that the only way to generate enough demand to fill the new seats is by cutting prices. And that risks triggering fres…