Summer Travelers Can Expect Crowded Planes and Higher Prices

by Doug Desjardins

The airline industry will continue its slow recovery this summer as leisure travel picks up. But travelers can expect higher prices and crowded planes.

The Air Transport Association of America (ATA) is projecting a 1% increase in passengers this summer during the three-month period from June 1 to Aug. 31, with an average of 2.2 million passengers per day.

“We anticipate that the summer 2010 travel season will be very modestly ahead of last year,” said ATA president and CEO James May. “We would like to see even more growth but this slight uptick in the number of travelers is a positive sign for an economy and an industry in recovery."

The ATA expects domestic travel to remain stagnant at 176 million passengers, with international travel increasing 7 percent to 26 million passengers. Passengers can also expect most flights to be full.

“This summer, nearly 90 percent of seats to all U.S. destinations will be full,” said Rick Seaney, CEO of FareCompare.com, which tracks ticket prices and airline industry trends.

He said travelers can also expect ticket prices to be higher this year, with the average airfare projected to increase 22 percent compared to fares in the summer of 2009. The increase is due, in part, to less competition as the recent merger of Northwest and Delta Airlines and the expected merger of United and Continental create less competition in the marketplace.

“Back in the old days, one airline would lower fares and another airline would lower theirs in response,” said George Hobica of airfarewatchdog.com. “Those days are gone now.”

Higher fuel prices are also to blame, according to the ATA. “One particular challenge this summer is high jet fuel prices,” said May. “We anticipate that jet fuel prices will be approximately 20 percent higher than last summer’s prices. This means that even as demand continues to gradually improve for air travel, we face rising fuel prices once again, which could hamper recovery efforts.”

To compensate, most airlines are imposing peak travel fees for summer flights. The five major airlines – American, Continental, Delta, United and US Airways – are imposing fees of up to $30 per flight for 74 of the 98 days from Memorial Day to Labor Day.

“What we are seeing, basically, is a change in the way airlines raise their fares,” said Seaney.

Airlines are defending the peak fees as a necessary part of doing business. “It is simply a different way of filing a fare charge that is less cumbersome administratively to file in situations where it is aimed at specific dates,” said American Airlines spokesman Tim Smith.

But not all airlines are charging peak fees. Southwest Airlines has decided against the fees, with a spokesman saying the fees are “not a trend Southwest Airlines sees as a benefit to the company.”

Resources

ATA Estimates Modest Growth in Number of Summer Passengers

Summer Travel Deals

Major U.S. Airlines Impose Peak Travel Fees on Most Summer Travel