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Airfares expected to rise modestly next year

October 21, 2012|By Hugo Martin

The bad news for air travelers is that domestic fares have risen about 4.5% so far in 2012, bringing the average airline ticket to about $375.

The good news is that so far, the increase is modest compared with 2011, when fares jumped 8.3%. Even better news, industry analysts predict air fares will rise even less in 2013.

But before you pop the cork on the champagne, industry experts warn that fares could still soar in the last two months of the year.

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Southwest Airlines, the nation’s largest carrier of domestic passengers, raised domestic prices last week between $4 and $10 per round trip, depending on the route. All the major U.S.-based carriers matched the increase.

The price boost was the 14th attempted one in 2012, half of which were matched by all the major airlines. The other half were rescinded after few, if any, airlines followed suit.

“It’s impossible to say if 2012 will see more airfare hikes, but don’t bet against it — not if history is any guide,” said Anne McDermott, a spokeswoman for travel website FareCompare.

The average domestic fare in the month of September was $375.35, according to Airlines Reporting Corp., an Arlington, Va., company that manages payments for tickets between travel agents and airlines.

A forecast released last week by American Express Global Business Travel predicted that in 2013, airfares in North America would rise between 1% and 4%, depending on the airline, seat and length of the flight.

An earlier forecast by the business travel management company Carlson Wagonlit Travel came up with a similar conclusion: a rise of 2.8% for the year.

“While the economies of the United States and Canada are experiencing slow and steady improvement, there is no major growth expected in the foreseeable future, which will help contain travel price increase in 2013 for most categories,” that forecast said.

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Follow Hugo Martin on Twitter at @hugomartin

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