Airports, Planes Will Be Packed to Overflowing This Summer

Look for higher airfares, higher gas prices and long lines at airport security this summer. Planes will be so jammed that even getting the middle seat on a flight you want will count as a minor triumph.

And yet, Americans will travel more this summer than at any time since the busy summer of 2000 -- before a recession and the Sept. 11, 2001, terrorist attacks with hijacked aircraft sent the U.S. travel industry into a slump it is only now pulling out of.

Pent-up demand is driving predicted surges in both domestic and international travel this summer, industry experts say, and even the expected discomfort of high prices and crowded venues will not seriously deter travelers bent on luxuriating in sun and surf, revisiting old family favorites and seeing the classic sights of the Old World.

"Americans are not going to give up their summer vacation,'' said Chris McGinnis, a San Francisco travel analyst and author of a summer travel forecast for the online travel agency Expedia.com. "Gas will be over $3 a gallon, and airfares will be $20 to $30 higher than last year, but that's not enough to keep them from going away for the hallowed institution of the summer vacation.''

According to the Expedia study, 55 percent of Americans say they will fly as much this year as they did in 2005, with 6 percent saying they'll fly more -- even though airfares have risen about 10 percent from this time last year and may rise again by summer, thanks mostly to surging jet fuel prices for U.S. and international airlines.

Many vacationers will travel somewhat differently this year, McGinnis said, given high prices and a weak dollar. "Travelers are considering shortening their vacation, and staying at a Hampton Inn, for example, instead of, let's say, a full-service Hilton,'' he said.

And those going overseas are beginning to consider less-expensive countries in Eastern Europe, rather than the pricey euro-zone in Western Europe, he said. McGinnis himself is doing just that, combining a summer vacation in Greece with a visit to Croatia, which he says is emerging as an economical alternative to neighboring Italy. "It's got beautiful beaches, the same weather and a lot of history,'' he said of Croatia.

Budget-busters or not, longtime favorites in Western Europe are still expecting a strong influx of Americans. British Airways has reported stronger advance bookings to the United Kingdom this year than last, and Expedia said the top foreign travel destinations booked on its site are, in order of popularity, London, Paris and Rome.

Old favorites dominate domestic travel, too, McGinnis said, with Las Vegas emerging by far as the favorite U.S. destination for Americans and Orlando coming in second.

Early Birds Planning

The Travel Industry Association of America, which represents U.S. tour operators, hotels, airlines and others and promotes travel to and within the United States, is still crunching numbers for its summer forecast, according to spokeswoman Cathy Keefe.

One thing the association has already noticed, though, is that people are gearing up for trips earlier than in past years, in hopes of locking in deals. In a report released last month, the group found that 81 percent of Americans surveyed said they had already started to think seriously about their summer trips -- about 30 percent more than usual this early in the year. For the entire year, the association expects domestic leisure travel to increase about 4 percent from last year.

Early bookings help beat the crowds, and may help save money, as prices tend to rise as summer approaches.

Gasoline prices and airfares have continued to spike in recent weeks, with airlines adding or extending fuel surcharges. In some cases, fuel surcharges were instituted last year and left in place to grow. Last week, Lufthansa Airlines said it would raise transatlantic fares $12 each way, sending its existing surcharge to about $80 per ticket each way. On April 12, American Airlines increased its fuel surcharge $10 each way on long-haul flights.

Fares are rising because fuel costs are rising, industry representatives say. A gallon of jet fuel cost domestic U.S. airlines $1.85 in the first quarter of this year, according to the Air Transport Association, compared with $1.45 in the first quarter of 2005.

Airlines May Turn Profit

The U.S. airline industry has lost a staggering $42 billion since 2000, according to the association's chief economist John Heimlich, thanks to a powerful combination of slumping passenger numbers from 2001 to 2004, high labor costs, heavy debts -- and rising fuel costs. This year, Heimlich expects the nation's airlines to lose $2 billion more, though they may turn a small profit in 2007 if they can continue to increase fares, he said.

"The painful reality for passenger carriers is that the domestic market has been unwilling to accept fares that reflect high fuel prices,'' Heimlich said.

Airline losses have come about in spite of the fact that their planes are consistently crowded. Load factors, the percentage of available seats sold, averaged a robust 80 percent last summer, according to Standard & Poor's equity analyst Jim Corridore. This year, Corridore told Reuters, he expects load factors to approach 90 percent.

Even so, the popularity of discount fares -- which hover about where they were in 1988, according to Heimlich -- means that the airlines continue to lose money.

Only Southwest Airlines, the low-cost pioneer among U.S. carriers, is consistently profitable, with Wall Street darling discounter JetBlue Airways losing money and low-fare carrier Independence Air liquidating earlier this year.

Also on the radar screen this summer: persistently long waiting times at security checkpoints in many airports, travel experts say.

Some of the nation's airports have agreed to experiment with a registered-traveler program that would speed fliers who volunteer to have their personal data encrypted on microchips through long security lines. But with most travelers lining up and cooling their heels in the usual manner, airports are expected to be crowded.

At San Francisco International Airport, which dominates international travel in Northern California, the number of international passengers is growing especially fast, according to SFO spokesman Michael McCarron.

"International traffic is up 8 percent over 2000,'' McCarron said of a busy year the aviation industry uses as a benchmark. "It's been strong all year.''

SFO, the Bay Area's prime gateway to and from Asia, should benefit from Americans' growing interest in Asia. The number of Americans considering travel to Asia this year surged to 37 percent from 20 percent in 2005, according to a new survey sponsored by Foster City's Visa International and the Pacific Asia Travel Association, and conducted by A.C. Nielsen.



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