Shelbyville Daily Union

Community News Network

July 3, 2014

Higher airfare, crowded planes likely to linger after summer

WASHINGTON — Air travelers are paying more to fly in the U.S. this summer on crowded planes as carriers keep capacity tight, conditions passengers will have to get used to beyond the vacation period.

Carriers are offering fewer flights, have dropped routes to certain cities and in some cases are flying smaller planes on trips in the U.S. amid strong demand, helping to boost summer fares 4.5 percent from a year ago.

An average domestic round trip fare has climbed to about $399.48, based on data from Travelocity.com. An international ticket is about 2.3 percent more than a year ago, at $991.82.

This is the busiest season for U.S. carriers, with passenger traffic at its heaviest in July, followed by August, then June, according to data compiled by Bloomberg. Airlines for America, an industry trade group, forecast that travel on U.S. carriers this summer will be the highest in six years. But don't expect seats to open up or fares to fall much once summer ends.

"Unless and until we see meaningful expansion among existing airlines or new competitors successfully launch service, we will continue to see airfares increase and flights remain crowded," said Henry Harteveldt, a travel industry analyst and founder of Atmosphere Research Group in San Francisco.

About 210 million passengers, or 2.28 million a day, will travel on U.S. airlines from June 1 to Aug. 31, Airlines for America said. That's up 1.5 percent from 2013. More Americans will also hit the road over the five days around the 4th of July holiday --34.8 million, according to AAA, the biggest U.S. motoring organization, up 2 percent from last year.

"For people who want to travel long distances reasonably quickly, air travel is really the only viable option," in the U.S., which lacks an extensive high-speed rail network, Harteveldt said.

 An increase in summer travel reflects the economic recovery boosting consumer confidence and spending. Airlines too have rebounded from recession-era belt-tightening among travelers, posting record operating revenue last year, aided by almost $6.2 billion in baggage and reservation charges.

"This summer ticket season has been so strong there have been few fare sales," said Savanthi Syth, a Raymond James Financial Inc. analyst. "Demand has been strong and they are able to fill the airplane at higher price points."

Current strength in the U.S. market offset lower-than- anticipated results from routes across the oceans last month, Delta Air Lines Inc. said yesterday. Increased competition for overseas flights has led to overcapacity, thereby reducing the average fare per mile, Delta said.

After several mergers in recent years, including American Airlines with US Airways, and Delta with Northwest, there are fewer airlines operating today and they're also pulling out of smaller hubs, further reducing options or forcing passengers to take multiple flights to a destination.

"The airlines have finally figured out that the way for them to reach profitability is to make it more trouble to travel and raise fares," said Greg Raiff, chief executive officer of Private Jet Services, a corporate jet services firm. "Paying more is the new norm."

Nine U.S. airlines are holding down growth in seats and flights, adding about 0.9 percent capacity on domestic routes in June from a year ago, 1 percent this month and 0.3 percent in August, according to Dan McKenzie, a Buckingham Research Group analyst in New York. Better matching demand fills planes and generally helps carriers raise fares or limit the number of low- price tickets sold.

An average 85.3 percent of seats were filled on Delta's domestic routes this year through June, up 2.2 points from a year ago. American, United Continental and Southwest Airlines each reported a higher average number of seats filled this year through May, the most recent data available.

"It's the perfect storm for higher ticket prices -- less seats coupled with higher demand, especially around high peak travel periods," said Courtney Scott, senior editor for Travelocity. "That's really the time when we see these higher prices."

And while most airlines are buying new planes, most of them are being used to replace less fuel-efficient, older models instead of expanding fleets and flights.

In addition to higher fares from airlines this summer, the Transportation Security Administration will increase the Sept. 11 security fee to $5.60 each way on July 21. The fee currently is $2.50 for a nonstop flight and $5 on a trip with connections. Under the new fees, trips with lengthy stopovers -- more than four hours between two domestic flights -- will see larger increases.

 

1
Text Only
Community News Network
  • Ice bucket challenge trending up

    Internet trends are a dime a dozen these days. Everything from Tebowing to planking to the cinnamon challenge can cause a wave of social media activity that can last for weeks before fizzling out.

    August 19, 2014

  • Africa goes medieval in its fight against Ebola

    As the Ebola epidemic claims new victims at an ever-increasing rate, African governments in Sierra Leone, Guinea and Liberia have instituted a "cordon sanitaire," deploying troops to forcibly isolate the inhabitants in an area containing most of the cases.

    August 18, 2014

  • Democrat? Republican? There's an app for that

    If you're a Republican, you might want to think twice before buying Lipton Iced Tea, and forget about Starbucks coffee. If you're a Democrat, put down that Reese's Peanut Butter Cup, and throw away the cylinder of Quaker Oats in your pantry.

    August 18, 2014

  • Five myths about presidential vacations

    In the nuclear age, presidents may have only minutes to make a decision that could affect the entire world. They don't so much leave the White House as they take a miniature version of it with them wherever they go.

    August 15, 2014

  • Can 6 seconds launch a career? A generation of Vine stars sure hopes so.

    A year ago, Shawn Mendes filmed himself singing a tentative acoustic cover of the Justin Bieber song "As Long as You Love Me" and put the results on Vine. He wasn't expecting much response. "I didn't really want anything to happen; I just kind of wanted to see what people would think," says Mendes, 16. "I posted that first Vine and woke up the next morning with 10,000 followers. That was pretty cool."

    August 14, 2014

  • Freshman.jpg 8 crucial tips for college freshmen

    With school starting back up around the country, no one has a bigger deer-in-the-headlights look than college freshmen.

    August 14, 2014 1 Photo

  • A night in Ferguson

    For the past week in Ferguson, reporters have been using the McDonald's a few blocks from the scene of Michael Brown's shooting as a staging area. Demonstrations have blown up each night nearby.

    August 14, 2014

  • weightloss.jpg The scales of injustice: Weight loss differs between men, women

    You're not imagining it: There really are differences between the way men and women diet, lose weight and respond to exercise.

    August 13, 2014 1 Photo

  • Robin_Williams.jpg Williams among many who cracked jokes while fighting depression

    Robin Williams isn't the only comedian who has struggled with a disease suffered by an estimated 350 million people worldwide. Williams, a comedian known for his manic energy, committed suicide Aug. 11 at age 63.

    August 13, 2014 1 Photo

  • Drug dealers going corporate

    A top federal official on Tuesday said that 105 banks and credit unions are doing business with legal marijuana sellers, suggesting that federal rules giving financial institutions the go-ahead to provide services to dealers are starting to work.

    August 13, 2014

Featured Ads
AP Video
US Trying to Verify Video of American's Killing FBI Director Addresses Ferguson Shooting in Utah Raw: Police at Scene of St. Louis Shooting Police: 2 Calif. Boys Planned School Shooting NOLA Police Chief Retires Amid Violent Crimes Lunch Bus Delivers Meals to Kids Out of School Water Bottles Recalled for Safety Researcher Testing On-Field Concussion Scanners Rockets Fired From Gaza, in Breach of Ceasefire Raw: Japanese Military Live Fire Exercise Police, Protesters Clash in Ferguson Independent Autopsy Reveals Michael Brown Wounds Nashville Embraces Motley Crue Obama: 'Time to Listen, Not Just Shout' Lawyer: Gov. Perry Indictment a 'Nasty Attack' Raw: Russian Aid Convoy Crosses Into Ukraine Iowa Man Builds Statue of a Golfer Out of Balls Assange Gets Cryptic About Leaving Embassy in UK Raw: Building Collapse in South Africa, 9 Dead Raw: Pope Francis Meets 'Comfort Women'
Poll

Should the minimum wage for workers be raised in Illinois?

Yes
No
     View Results
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Helium debate
Helium