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US air fares going skyward
US flight cutbacks this year have helped airlines raise domestic air fares by an average of about 8%, a trend they hope will continue, says MarketWatch.
Airlines can’t speak about specific plans to raise ticket prices.
“But carriers will try for further fare hikes this spring as seats get more scarce,” predicts MarketWatch.
Some experts are predicting slight capacity cutbacks.
Clayton Securities Analyst Ray Neidl is quoted as predicting this spring will test ticket price hikes, especially in markets served by Delta and Northwest.
Fuel prices, a thorn in the side for the airlines, seem to have stabilized.
Southwest Airlines in the past could keep its cost advantages because of its long-term oil contracts. But those are expiring and the airline is losing its advantage, leading to speculation it will have to raise fares.
If that happens, other airlines could follow.
The Federal Aviation Authority (FAA) says it expects domestic airline capacity to shrink 0.7% this year. But at the same time, the FAA expects US carriers to grow in the future to one billion passengers by 2015.
“In the long run, inexpensive tickets, a strong national economy, and increasing demand for seats aboard aircraft should bode well for the industry and consumers,” the FAA said.
Report by David Wilkening
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