Airlines

The annual survey of frequent fliers by Seatguru.com, the popular online guide to airline seating, doesn't have a lot of highlights for U.S.-based airlines. U.S. carriers serve the worst food -- if they serve food at all, that is -- and have the least comfortable seats, the survey of 1,600 fliers found. Meals on American Airlines, United Airlines and US Airways were considered the worst of the bunch. The best?

More business travelers are moving to the back of the plane, downgrading from business- and first-class seats to coach and adding to airline financial woes. But fliers who still can sit in the front of the cabin are finding some of the best deals in recent memory: Premium fares are down more than 20% as airlines discount tickets to fill seats, according to the airline trade group International Air Transport Assn. By comparison, economy fares are down about 15% on average, the trade group said.

U.S. airlines are hiking fares as leisure travelers who stayed home amid the economic malaise are getting back in the air. In the last two weeks, carriers have raised domestic plane tickets twice by an average of $10 to $20 one way and are offering fewer fare sales, according to travel website Farecompare.com. "Two airfare hikes in the past few weeks is the strongest signal I have seen that the bottom is either here or near," Farecompare.com Chief Executive Rick Seaney said.

An airline in China is mulling over plans that would allow passengers to stand during short flights and pay less than those who have seats. Spring Airlines, a low-cost carrier based in Shanghai, said having passengers stand up in flight would enable it to cram 40% more travelers into its Airbus A320 planes while cutting operating costs 20%.

Despite signs that the country's economic free fall may be bottoming out, demand for business travel continues to plummet, putting airlines and hotels in financial straits. As businesses continue to tighten spending practices, corporate travel is projected to drop by 15% this year compared with 2008, while overall travel demand could decline by 11%, according to a study by PhoCusWright, a Sherman, Conn., market research firm. Corporate travel -- defined as business travel managed under strict corporate policies -- has historically represented about 40% of the total travel market, but PhoCusWright predicts that share will drop to 35% next year.

Arriba , arriba! The economy remains sluggish, but some airlines are expanding services and celebrating at more than 30,000 feet. Virgin America, the 2-year-old airline based in San Francisco, said Tuesday that it would add nonstop flights from California to Fort Lauderdale-Hollywood International Airport in Florida. The airline will begin Nov. 18 with two daily nonstops each from Los Angeles International Airport and San Francisco International Airport. Not to be outdone, JetBlue Airways announced the same day that it would also add daily nonstop service from San Francisco to Fort Lauderdale, beginning Nov. 17. JetBlue has run a daily nonstop between Long Beach Airport and Fort Lauderdale since 2003.

Although Southern California still enjoys shorts and T-shirt weather, airlines have already started to roll out discount fares for Thanksgiving, Christmas and New Year's travel. This is great news for bargain-hunting travelers, but it signals growing desperation among U.S. airlines, which have seen revenues drop 21% in July versus the same month last year, according to the Air Transport Assn. of America, the industry trade group that represents most passenger airlines in the country.

They couldn't have known it at the time, but United Airlines and other U.S. carriers were dealt a lucky break last year when an oil shock made it appear they were headed for bankruptcy. Overseas rivals, who were shielded from stratospheric fuel costs and the collapse of the U.S. dollar at the time, are now months behind the U.S. airline industry in dealing with the aftereffects of the global economic crisis that started as fuel prices fell, analysts said. International carriers such as Germany's Lufthansa and Air France-KLM are starting to lay off workers and trim routes as it becomes evident that lucrative international business flying will continue to be depressed for the foreseeable future.

With summer over and vacation travel done for the season, the recession-battered airline industry took stock in the last week or so and found scant signs of improvement. Here's a rundown of the major findings: Pent-up passenger demand and cuts in airline capacity could lead to fare increases of as much as 6% globally and 7% in North America, according to the American Express Global Business Travel Forecast, which was released this week. Ancillary fees -- those charges to check an extra bag, change a flight or order a cocktail, among other costs -- are also expected to inch up, raising the overall cost of a domestic business trip by 1.2% to an average of $1,080, according to the report.

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.