ATLANTA–The grip U.S. airlines have on travelers’ wallets is about to get tighter as carriers go ahead with plans to trim their domestic schedules due to the high cost of fuel. Executives acknowledge that despite the economic downturn, fares will ri
ATLANTA–The grip U.S. airlines have on travelers’ wallets is about to get tighter as carriers go ahead with plans to trim their domestic schedules due to the high cost of fuel.
Executives acknowledge that despite the economic downturn, fares will rise, discounts currently available will be scarce, and routes and frequencies of flights will be reduced as domestic capacity is cut through the end of the year. The changes starting in September come on top of a litany of new charges – for luggage, drinks, pillows and other amenities–announced by some airlines earlier this year. "
Airline travel is airline travel–it’s been bad for a long time," Chris Bardasian, an American Airlines frequent flyer, said recently at Dallas- Fort Worth International Airport. "I suspect prices will go up, fewer people will travel, and if you’re willing to pay the price, it will be fine."
There were sharp capacity cuts during prior weak economic periods in the early 1990s and between 2001 and 2003, but fares went down as discount carriers moved in and filled the void, offering more competition, analysts said. But the high price of oil, airlines’ limited ability to further cut certain costs and the fact that many of the discount carriers are facing the same difficulties as the big carriers make things different this time, analysts said.
"Despite this sluggish U.S. economy, the general demand picture is better than it was post-9/11," said Standard & Poor’s analyst Philip Baggaley. "In addition, you have this consistent response across the board of airlines raising fares and adding fees."
On average, domestic fares between large metro cities are already up roughly 16 percent since Jan. 2, while fares between small cities are up roughly 37 percent year-to-date, according to Rick Seaney, head of airfare research site FareCompare.com.
The cheapest round-trip ticket with a 10-day advance purchase, for example, on an American Airlines flight from Chicago to New York cost $258 on Aug. 26, excluding government and airport fees. That was an 87 percent increase from the $138 it cost on Jan. 2 for a similar advance purchase, according to FareCompare.com. The cheapest round-trip ticket with a 21-day advance purchase on a United Airlines flight from Denver to Washington cost $382 on Aug. 26, excluding government and airport fees. That was a 37 percent increase from the $278 it cost on Jan. 2, Seaney said.
AP
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed
About Post Author
