Published on Tuesday, June 14, 2011

End to higher airline ticket prices?



There’s increasing evidence the airlines will have to call a halt to rising prices, travel observers say.


Why?


Because the economy is again slowing. The stock market is sputtering. And high oil prices are cutting into household budgets.


“The airlines may be harder pressed to keep their fares up and planes packed, at least without resorting to significant cuts in capacity when the summer vacation season is over,” says The New York Times.


Most airlines have failed to raise rates since March because, it appears, some passengers are passing on the higher prices.


“Airlines have overreached,” said George Hobica, the founder of AirFareWatchdog.com.


But so far, at least, the airlines have squeezed revenue out of passengers through higher fares and a growing number of fees.


“It has not hurt that mergers have left fewer airlines and that they have taken a more disciplined approach to controlling capacity,” says the Times.


So far this summer, air demand remains high. There’s an increase of 1.5 percent over last year, according to the Air Transport Association. The airline group predicts international passenger traffic this summer to break last year’s record.


By David Wilkening



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