As summer ends, flyers brace for airline changes
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 this month 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 guys make things different this time.
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.
Recently announced airfare sales for travel during the traditionally slow fall season will be harder to come by as more capacity comes out of the system in the last four months of the year.
"If somebody sees a good fare, they should grab it," said Kevin Healy, senior vice president of marketing and planning for AirTran Airways.
Booking early for travel during peak times like the holiday season generally can get you a cheaper ticket than waiting until the last minute. But, airlines usually don't offer fare sales for holiday travel.
American Airlines, United Airlines, Delta Air Lines, Northwest Airlines, Continental Airlines, US Airways, JetBlue Airways, AirTran and Alaska Airlines plan to cut domestic capacity during the third and fourth quarters by single- to double-digit margins.
JetBlue will end service this month between several cities, including Boston to San Francisco and Washington to Las Vegas. Southwest, which had resisted the kinds of capacity cuts being made by other carriers, will end service in November between Kansas City and Sacramento, Calif., and between Oakland, Calif., and Tucson, Ariz. Some airlines, including JetBlue and Southwest, are adding or expanding service to states where other carriers are reducing service, like Florida. But Southwest said recently that it will eliminate nearly 200 flights early next year as it struggles with high fuel costs and a weakening economy.
Fewer overall seats in the air means planes that remain will be fuller, which gives airlines pricing power to raise fares.
Several airlines are now charging fees for a first checked bag. Some have imposed a fuel surcharge on frequent flier reward tickets. US Airways is even charging for soda.
Cuts in the number of flights in the U.S. also could mean people who booked flights far in advance for travel after September might have to fly at a different time or, if a route has been eliminated by their carrier, they might have to find another airline to get them to their destination.
As for frequent fliers, capacity cuts could mean fewer award seats available at the lowest level of award travel.
Airfare observer Tom Parsons of Bestfares.com said recently he believes that fares could fall early next year because discounter Southwest already has published its schedule and fares for that period. But Seaney said any fare decreases by major carriers would be limited to routes they compete on against Southwest.
The question on a lot of travelers' minds is how long will airlines be able to continue to raise fares. Airline analyst Ray Neidl of Calyon Securities said in the short-term that depends largely on the economy.
"That's the thing that will be tested this fall," Neidl said.
AP