'Tis the Season to Pay Exorbitant Air Fares

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It's as much a part of the holiday season as the lighting of the tree at Rockefeller Center: the annual airline price gouge. And on Tuesday, Delta and American airlines, two of the nation's largest carriers, decided to keep with tradition and hiked their fares an average of 3 percent on domestic routes. Customers aren't likely to be sympathetic to the airlines' cries over rising fuel costs, which is the primary reason cited by Delta and American for their fare increases — nor should they necessarily believe it. "This is the time of year when airlines have enormous control over pricing," says TIME business writer Bernard Baumohl. "Demand is high, and people are willing to pay to get where they want to go. So every seat is filled, no matter what the price."

But while a few airlines may be able to capitalize on the public's urge to travel through the New Year, says Baumohl, they shouldn't expect that demand to last long once the tinsel and noisemakers are put away. Other major airlines have held fast against the increase so far, and aside from the initial gains from the holiday rush, the price increases could turn out to be very temporary for Delta and American. "These two airlines may be able to get away with these prices through the holidays, when demand is highest," says Baumohl, "but if the other airlines keep their prices down, Delta and American could be forced to lower prices." Also helping to keep ticket prices competitive: The popularity of bargain-basement ticket vendors such as Priceline.com. Hey, if the airlines continue to be squeezed by such trends, it may force them to do something drastic to lure people on board. Like giving us a whole can of soda.