Summer Travel Up Despite High Air Fares and Gas Prices

The travel industry has been hoping that travel will be up sharply this year. With seven weeks left in the traditional summer vacation, confidence in that prediction is building.


As prices at the pump have climbed, so have the costs of flying. Airlines have raised fares on various routes several times this year in part to recover rising prices for jet fuel.

But that has not stopped the public from taking to the skies. In June, passenger traffic rose by 5 percent for 17 U.S. airlines, compared with the same month last year, according to statistics compiled by Bloomberg News. The June load factor, the percentage of seats filled with paying passengers, was 83.1 percent for all airlines, up from 81.9 percent a year earlier.

The passenger traffic percentage gains for the first six months of 2005 are even greater than Junes, according to Bloomberg News

Prices are higher, but so is the passenger traffic. Thats an indication that consumers are digesting the higher fares, said Bob Harrell, president of Harrell Associates, a New York-based travel consulting firm.

The company calculates the cheapest leisure fare on a four-week running average for nearly 300 routes offered by the major carriers. That average price was 14 percent higher in the first week of July than the same time last year.

I think its fair to say leisure fares are up 10 to 15 percent through the spring and early summer over last year, Harrell said.

Terry Trippler, an airline expert at cheapseats.com, estimates that most round-trip tickets cost from $40 to $50 more than last year.

Some people will drop off because of the higher prices, Trippler said. But the airlines are picking up travelers like couples who decide not to drive their Navigator from Kansas City to Los Angeles because of the higher gas prices. Even though air fares are going up, its cheaper to fly than to drive that far with the gas and motels.

Trippler expects airfares to continue rising through the rest of this year and into 2006, after more than three years of extremely low ticket prices.

My advice is if you see a fare you like now for travel during Thanksgiving or Christmas, buy it, he said. I would bet the rent that it will be higher later in the year.

Kathy Sudeikis, vice president of corporate relations at All About Travel in Mission, said some consumers were already making their travel plans for spring break next year.

People who havent planned yet for this summer are kicking themselves, but its not stopping them from going, she said. There are occasions like family reunions and weddings in which the dollar amount for tickets doesnt really change peoples minds about attending.

The higher fares and full planes are good news for the airline industry, which has lost billions of dollars in the past three years. American Airlines and Continental Airlines this week reported quarterly profits. For American, the worlds largest carrier and the second-busiest at Kansas City International Airport with 21 departures daily, it was its first quarterly profit without special charges in more than four years. Still, the airlines could lose money for the year.

There have been some fare increases, but they have not offset the dramatic rise in fuel costs, said Tim Wagner, a spokesman for American. The headwind of historically high fuel costs and historically low fares is still not adding up to a healthy environment for the airlines.

The travel industry expects the fare increases to be sustainable, at least as long as the economy does not falter. For now it can count on travelers like Kim Warren of Kansas City, who is taking a three-week trip to the East Coast on which she will fly and drive.

Are costs up? Yes, she says, including hotel costs. But shes going anyway.

I cant consider that a big concern, she said.

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