Airfares Climb to 5-Year High

Airfares nationwide recently hit their highest levels since just before the 2001 terrorist attacks, reflecting hefty fuel prices and strong consumer demand.


Airfares nationwide recently hit their highest levels since just before the 2001 terrorist attacks, reflecting hefty fuel prices and strong consumer demand, according to information released Wednesday.

The Air Travel Price Index, which measures quarterly changes in fares paid by passengers on U.S. carriers, jumped 9.1 percent in the fourth quarter 2005, compared with the same period a year ago, when prices were at five-year lows.

Fares in Denver grew by about 5 percent, although ticket prices have come down significantly this year with the arrival of low-cost carrier Southwest Airlines.

The index, released by the Bureau of Transportation Statistics, showed the sharpest increases in Cincinnati; Greensboro/High Point, N.C.; Grand Rapids, Mich; Dayton, Ohio; and Atlanta.

Just two of the nation's top 85 markets posted decreases: Kahului, Hawaii (on Maui), and Richmond, Va.

"It's absolutely no surprise" that fares are going up, said Hugo Burge, vice chairman of Boston- based Cheapflights.com. "There's a three-pronged impact creating increases in prices. One is oil; secondly, there is an insatiable consumer demand; and thirdly, airlines are determined to return to profitability."

Large carriers pushed through numerous modest fare increases last year, and the trend has continued in 2006.

Still, the index in last year's fourth quarter was just 12.7 percent higher than during the same period in 1995, without adjusting for inflation.

The airfare scene in Denver, dominated by United and locally based Frontier, has changed considerably with the arrival of Southwest in January. During the first week of April, average fares at Denver International Airport were down 18 percent, compared with the same period last year, according to consulting firm Harrell Associates.



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