In the news:
Summer airfares keep on climbing
High airfares may cause some vacationers to pull back given the high cost of flights across the country and to Europe.
Los Angeles Times
Summer airfares are going up — sometimes more than $1,000 to European destinations and about half that for New York and Boston
For leisure travelers the high fares may put their vacations on ice.
And it's probably not going to get better any time soon.
Airfare experts point to three factors that are driving costs.
— Fuel. That's not a surprise to anyone who has filled up at the pump lately. (Sixty bucks to fill my car? Really? Really.) Five years ago, oil was going for $72 a barrel at summer's end. In mid March, it was at $107 a barrel. So we're paying about a third more these days, and when you multiply that by the 16 billion gallons of fuel airlines used in 2011, it's a world of hurt.
Airlines, mostly foreign ones, are tripping all over themselves to add fuel surcharges. (Domestic carriers tend not to do this, but foreign ones seem to do it with abandon.)
But don't blame it all on fuel prices. We seem also to be having a crisis of capacity and competition.
— Fewer seats. Airlines have been cutting seat capacity for the last several years by taking planes out of service. In 2000, flights were about 72 percent full; last year that number increased to about 81 percent. In June alone, flights were 85 percent full, which explains why you felt crammed in, cattle-car style.
— Decreased competition. Couple that with the recent merger mania — United/ Continental, AirTran/ Southwest, Northwest/ Delta — and you have fewer carriers. Less competition is rarely an incentive to lower prices.