Print

Email story

Comment

Email editor

Airline fares hit 5-year peak

Ticket prices at TIA are up about 12 percent from early 2005. And experts predict they'll keep rising, especially for walkups.

By STEVE HUETTEL
Published July 27, 2006

The price of airline tickets in the United States for the first quarter of 2006 was the highest in five years, according to a federal travel price survey released Wednesday.

Air fares nationwide were up 10 percent in the first three months of the year compared with the same period in 2005, the Department of Transportation report showed.

Ticket prices from Tampa International Airport increased nearly 12 percent, more than any Florida airport. But its average fare remained a bargain - at $332.83, the seventh-cheapest among the nation's 40 largest airports. The fare is a combination of round-trip and one-way ticket prices.

Airline prices reached a peak in the first quarter of 2001, and were at the highest level since the Transportation Department started its air travel price index in 1995.

A sharp drop in business travel and the Sept. 11 terrorist attacks crippled the industry soon after. U.S. carriers have lost a combined $40-billion since 2001.

But a series of fare increases, strong passenger demand and reduced aircraft capacity is helping them return to profitability despite persistently high fuel prices.

This week, Delta Air Lines raised most domestic fares by $5 one-way. Competitors including American Airlines, United Airlines and Northwest Airlines said Wednesday they were considering matching the increase.

If they do, it would be the seventh broad industry fare hike this year, excluding smaller increases by Southwest and ones aimed only at walkup travelers, wrote analyst Jamie Baker of J.P. Morgan Securities.

American Airlines parent AMR, Southwest, Continental Airlines and JetBlue Airways have reported profits for the second quarter. United Airlines parent UAL Corp, which emerged from bankruptcy reorganization in February, said this week it expects to post its first quarterly profit since 2000.

Airline experts expect carriers will continue pushing fares up, especially for business travelers forced to buy pricey walkup tickets.

"With oil at $70 a barrel, I don't think you'll see any relief," said Terry Trippler, veteran airline commentator and columnist for MyVacationPassport.com, a new travel club based in Minneapolis.

"You might see a little sale, a promotion to fill a booking gap. But they haven't raised fares in proportion with fuel costs, and they can't eat this anymore."

Information from Dow Jones Newswires was used in this report. Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

[Last modified July 27, 2006, 00:50:49]