Rising airfares threaten a return to the past when only the rich could afford this type of transportation, travel observers warn.
“Consumers are already shell-shocked by higher prices, but their wallets are going to be hit harder than ever before on their next vacation or business trip,” Rick Seaney, CEO of FareCompare.com, told USAToday.
The airline industry was deregulated and competition introduced more than three decades ago, which gradually made air travel affordable to almost everyone in the US.
But airfares this summer have risen more than any year in the past 25, according to studies by airfare experts. Rates increased anywhere from 10 to 100% and more.
Extra fees have also been a factor.
For a family of four, a cross-country flight this summer may cost about $1,000 more than last summer, reported wire services.
Higher airfares are causing vacationers and business travelers to cut back on air travel, and raising many companies’ travel costs.
But they are also having a spillover impact on other industries such as the meeting business and hotels, which say they are starting to feel the pinch of less visitors.
More airfare increases are expected in the fall, when carriers say they will reduce seat capacity on many routes and stop flying on others.
Reductions are needed because rising prices mean less passenger demand, American Airlines CEO Gerard Arpey said in a recent conference call.
American “has initiated or participated in over 30 domestic fare and surcharge increases” this year, he said.
Airline experts say it is not entirely the fault of carriers.
Consumers have enjoyed cheap fares since the airline industry was deregulated in 1978.
Stiff competition has kept fares low, but it has also driven many airlines out of business and forced others to struggle for profitability. Faced with record fuel prices, airlines this year may lose up to $10 billion, said the Air Transport Association (ATA), an airline trade group.
Report by David Wilkening
