The Travel Detective

Airfares are Going Up

Locations in this article:  Baltimore, MD Los Angeles, CA San Diego, CA

PlaneCloudsMay 4, 2007

Earlier this week, it was actually headline news when Southwest airlines raised fares systemwide…by $2.

Two dollars made headlines?

That small raise, which was immediately matched by American on routes where it competes with Southwest, represents millions of additional dollars to each carrier’s bottom lines. And travelers should brace themselves for these small fare hikes throughout the summer.

The airlines have apparently learned their marketing lessons: that a one-time $10 or more fare increase can shift a market away from them. But ten $2 fare increases spread out over two months is something the public will tolerate — or barely notice.

Well, I noticed. And you should, too…and the airlines not only play this game with fares, but with capacity.

If an airline has four flights per day between two locations running 70 percent load factors and can pull one flight out — and allocate that aircraft on a route that can get them a higher fare yield per passenger — it will quietly do so.

Result: three flights running at 94 percent load factors and then, because seats are tougher to get, the airline also raises the fares.

Think about when was the last time you were actually on a flight that wasn’t packed to capacity?

We’re getting hit with a double whammy — increased fares and decreased capacity.

To make matters worse, it’s the small U.S. communities getting hit the worst. Air service is diminishing to smaller cities. And when capacity is pulled, it’s not always immediately replaced by competitors.

Translation: this is going to be a tough summer for travelers. More of us will be traveling than ever before, paying higher base fares (and let’s not forget the inevitable fuel surcharges we’ll be hit with as gas nears—and surpasses— $4 per gallon) and flying in a lot less comfort.

If only we had a better network of rail lines in the U.S.

I am a big believer in the train alternative — and where it works, it really works: between Los Angeles and San Diego, an airline ticket is more or less prohibitive. But the train between LA and San Diego is a joy.

Between New York and Baltimore (or Washington D.C.), Amtrak is my preferred route. And it’s the most economical, not to mention efficient, in terms of quality travel time.

In fact, if you did a race between two people — one flying on the LaGuardia-D.C. shuttle and the other taking Amtrak’s Acela — it would be a tie, if you factored in time to check bags and go through security, plus waiting time on the runways.

But Amtrak would win overall, since the seats are more comfortable, you can plug in your laptop and cell phone to recharge, and get some quality work done on adult-size tray tables.

If the major airlines had their way, they’d sell their commuter subsidiaries. And if passengers had their way, the advent of VLJ’s — very light jets — can’t come fast enough.

The concept of air taxis flying between small airports instead of through major airport hubs makes sense on virtually every level, once you can establish frequency. Frequency brings cost down, and not having to suffer through hubs saves time and aggravation.

But for the moment, and with some small rail exceptions, I’m afraid you may have to just grin and bear it this summer.

The dreaded, and more expensive, center seat awaits you. Uggh!

For more airfare news, check out New Types of Airfare Alerts.