It's harder to fly cheaply this summer

Jul. 20--If you've traveled by air recently, you probably felt the difference.

Planes are packed, and finding a deep-discount ticket is harder than it used to be.

Former Houstonian Katie Davenport found that out the hard way on a recent trip back to Houston via Continental Airlines. Flying early on a Saturday, she thought maybe she would be assigned a seat next to an open one, where she could just plop her 9-month-old daughter, Julia, next to her in her infant car seat.

She told Continental when she arrived that she was traveling with a baby.

"The attendant behind the counter told me, this flight is overbooked," said Davenport, who lives in Washington, D.C.

That meant Julia traveled from Washington to Houston on her parents' laps.

These overbooked planes show that despite a bevy of fare hikes to cover soaring fuel costs, passenger traffic is still strong this summer. The high demand and rising fares are big factors behind the strong profits expected to be reported by the airline industry, which in recent years has struggled.

And they could allow Houston-based Continental Airlines to wing its way to an annual profit this year, starting with its second-quarter earnings report that is scheduled to be released today.

Fares have increased several times this year alone, in part because low-fare leader Southwest Airlines has been involved. That's pushed prices up on tickets for last minute business travelers and some leisure travelers.

"Business fares are up 27 percent year-over-year and leisure fares are up 3 percent year-over-year," noted airline consultant Bob Harrell of Harrell Associates in New York City.

Fares, fuel prices rising

All the carriers are raising fares as a way of keeping ahead of higher fuel prices.

Although paying customers are seeing some higher fares than the past few years, fares have just now begun climbing back and aren't back at levels seen five years ago, data compiled by BACK Aviation Solutions and the U.S. Department of Transportation show.

But finding a cheaper ticket can be a hit-or-miss proposition these days. Frequent fliers are finding it is harder to use the miles they've earned to get tickets on popular routes.

At many airlines, frequent fliers have encountered problems getting seats as planes have gotten fuller. Frequent flier Marilyn Franks, who just got back from a trip to Hawaii where she used her miles, said that is probably because the prospective passengers waited too long to try to get their tickets.

"You can't expect the airline to have seats available" if you wait too long, said Franks, a Houston teacher who is a frequent flier on Continental. "We are going to Europe next summer and we just got our tickets now for the end of May of next year."

The fuller planes mean it has become more difficult to snag choice seats, whether leisure or business. That has been the case for executives with Houston-based Aramco Services, said Nancy D. Rosen, a supervisor in the company's logistics division.

First-class seats on the network carriers have been particularly difficult to nail, she said.

"It is very hard to find a last-minute premium seat," Rosen said. "We encourage our people to book as early as possible, but sometimes business dictates don't allow that."

Most airlines have reduced their number of available seats on domestic flights by shrinking their fleets and using smaller planes to match supply with demand on certain routes, according to the Air Transport Association.

The big six carriers -- American, Delta, United, Continental, Northwest and U.S. Airways -- have a domestic operating fleet of 759 airplanes, which is 22 percent smaller than it was in July of 2001, according to the transport association.

"While this means less fuel burned and reduced operating costs, it also means fuller planes," the ATA said in a statement regarding what travelers can expect in air travel this summer.

"With many flights near full capacity, you will see fewer open middle seats."

All of this helps the airlines' bottom line.

Calyon Securities analyst Ray Neidl predicts the U.S. airline industry will show a quarterly net income of about $1.2 billion.

"This positive trend should continue through the third quarter and even possibly into the slow fourth quarter," Neidl said in a report issued several days ago. "We are projecting the industry to earn about $747 million for the year."

Higher fares possible

Neidl said these high load factors suggest there's enough demand out there to allow carriers to raise fares further.

That would be a big turnaround for U.S. air carriers, particularly after some five years of collective losses that easily have surpassed $30 billion.

Continental set records for load factors just during the past few weeks.

June 29 and 30 were the two highest consolidated load-factor days on record, at 92.5 percent and 91.9 percent, respectively, said carrier spokeswoman Julie King.

"The 95.2 percent domestic load factor on June 30 also was a company record," King said.