Don't expect fares to jump just because four major airlines are now in bankruptcy and desperately need the extra cash.
So say industry observers who maintain that the slide in ticket prices in recent years won't reverse course -- at least not anytime soon -- even with four of the seven largest U.S. carriers operating under Chapter 11.
"Most of the pressure on fares is still downward," said Robert Harrell, whose Harrell Associates in New York tracks industry pricing.
Delta Air Lines Inc. and Northwest Airlines Corp. last week joined UAL Corp.'s United Airlines and US Airways Group Inc. in seeking protection from creditors in U.S. Bankruptcy Court.
Because all continue to fly -- and the underlying issues that landed them in Chapter 11 haven't gone away -- nothing short of a major carrier going out of business may do much to change the price picture, analysts said.
The large, traditional airlines have suffered multibillion-dollar losses in good part because drooping fares aren't enough to cover their enormous debts, pension obligations and daily operating costs.
Although passenger traffic has rebounded from its slump after the Sept. 11 terrorist attacks, the big carriers are still struggling to raise prices because of increasing competition from lower-cost discount airlines.
Ticket prices, as measured by the U.S. Department of Transportation's most recent air travel price index, fell 4.3% in this year's first quarter from a year earlier. Fares have risen a paltry 3.9% over the last decade, the index showed, even as overall consumer prices rose 29%.
Those ticket prices include taxes and various security fees imposed after 9/11. Without those added costs, the decline might have been steeper.
Both leisure and business fares are falling. In this year's second quarter, the average one-way domestic fare paid by business travelers was $218, down 16% from $259 in 2000, American Express Co.'s travel management unit reported last week.
That's been a boon for passengers but a headache for the airlines.
Hurricane Katrina made matters worse. The carriers' fuel costs, which typically account for about 15% of their total expenses, were already up sharply when the storm sent them to unprecedented highs by disrupting Gulf Coast production.
To remedy the problem, Delta and Northwest said, they plan to use the Chapter 11 process to shrink their service -- or "capacity" in airline jargon -- to become more efficient, lower costs and better align their size with today's low-fare environment.
