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Airfares, fees likely to go up next year

October 11, 2009|Jen Leo and Jane Engle

Prices may be coming down at the pump, but they're going up at the ticket counter. Look for higher airfares next year too, some forecasters say, and maybe another round of fee hikes.

Of course, no one knows for sure, given the wobbly course and snail's pace of what is touted as recovery from the recession. But the price trends aren't looking good for fliers.

Take Southwest Airlines. When this low-cost leader announced a winter sale at the end of last month, it offered fares from $59 to $149 each way on select dates through Feb. 11, for purchase by Thursday.

Tom Parsons, chief executive and founder of, noticed a big difference.

"Airfares that once sold for $99 one way, or $198 round trip, system-wide, are now $149 one way, or $298 round trip," he said.

Southwest is not the only airline raising prices. The AirfareWatchdog blog recently noted that Delta, American, United and US Airways had added $10 per ticket on peak travel days for the winter holidays.

In a recent teleconference, American Express said it expected slight fare increases in North America and Europe in 2010 (see chart) and larger increases in the Asia-Pacific region.

You might wonder how fares can go up in tough times. American Express says it's all about supply and demand: Business travel is expected to pick up a bit next year, even as airlines sideline jets to keep supplies low.

And then there are the fees.

George Hobica, founder of AirfareWatchdog, wrote a post called "Eleven Airline Fees You've Never Heard of . . . but That You Could See Soon." Among those on the list: Online booking fees, priority boarding fees and infant fees. British Airways now charges to choose your seat in advance.

Can we begrudge the airlines for this fee frenzy?

"Even with the new fees, airlines are losing billions," Hobica said. "So it's either fees, higher fares, or we'll see some more airlines fall into the aviation ash heap along with TWA, Pan Am, Skybus and Independence Air."

Travelers, it's time to tighten your belts. And we're not talking seat belts.




The economics of flying

Despite a decrease in passenger traffic this year, airfares in 2010 are expected to increase in many -- but not all -- countries, according to a forecast released recently by American Express. The economy-class domestic fares for each country represent projected fares for air transportation within that country next year; the business-class international fares represent projected fares for air travel originating in that country and terminating in another country, also for next year.

*--* COUNTRY/ DOMESTIC INTERNATIONAL REGION combined Economy class Business class United States 2% to 7% 3% to 8% Canada 2% to 6% 0% to 5% North America combined 2% to 7% 1% to 6% France 0% to 2% 4% to 6% Germany 0% to 2% 6% to 8% Sweden 1% to 3% 7% to 9% Britain 0% to 2% 5% to 7% Europe combined 0% to 2% 5% to 7% Argentina 3% to 8% 0% to 2% Brazil -3% to 1% -1% to 2% Chile -1% to 3% -1% to 3% Mexico -3% to 0% -2% to 1% Latin America combined -3% to 2% -1% to 2% Australia 1% to 6% 2% to 7% China 3% to 8% 2% to 7% Hong Kong 2% to 7% 2% to 7% India 3% to 8% 1% to 6% Japan 3% to 8% 2% to 7% Singapore 3% to 8% 1% to 6% Asia/Pacific combined 3% to 8% 1% to 6% *--*

Source: American Express Business Travel's Global Advisory Services

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