When will travelers stop flying?
If 2008 is any indication, airfare inflation caused by rocketing fuel prices will soon have an effect on ticket buying.
This post comes from Lynn Mucken at MSN Money.
Like waves at the beach, airfare hikes just keep rolling in. U.S. carriers have slapped on nine increases since Dec. 1, with even Southwest Airlines, usually reluctant to follow industrywide increases, joining the stampede.
The reason, of course, is rising fuel prices -- fuel gobbled up about 40% of airline revenue in 2010. "Fuel is just such a huge headline," Southwest CEO Gary Kelly said this week. "Our fuel bill compared to last year, adjusting for some slight changes in capacity, is up $1.3 billion."
With each price hike, ticket costs have gone up $5 to $20, depending on the airline. Post continues after video.
Some carriers also are increasing baggage fees or slapping fuel surcharges on certain routes. Booking this week for a mid-April round trip on the heavily traveled Los Angeles-to-Seattle route at even the most inconvenient times will cost you at least $280. That was a $200 trip not so long ago.
"A traveler who paid $240 for a round trip on the first day of the year is now paying closer to $300 -- a 25% increase," said Rick Seaney of FareCompare.com.
Given the spreading unrest in the oil-producing Middle East, no one is sure where prices will go. The question is: Will travelers continue to fly?
Truth is, the thrifty traveler has few options. Suppose you live in Boston and want to take your two kids to Disney World after school lets out in June? Boston-Orlando is a very cheap route, so buying today for a midweek June trip will cost the family about $915, including taxes.
The other option, driving the 2,230 miles round trip in the family van, will cost you $400 in gasoline at today's prices. Even if you are masochists, you still have to overnight once in a motel each way, another $250. Four days of eating on the road? At least $100 a day; a lot more if you actually get out of the van.
That's $1,050, and you lose four days of that weeklong vacation by driving. Face it: If you are determined to go to Disney World, you're going to take the three-hour flight instead of driving.
But cheaper does not mean affordable, so the other option may become not flying at all. In 2008, the last time fuel prices -- and thus airfares -- jumped this dramatically, air travel dropped 13.4%, according to the IATA, an industry group that represents 230 airlines.
But in late summer of 2008, the Great Recession had not yet hit Americans hard. Home values were still up, businesses were thriving and massive layoffs were months in the future. Today there are too many people unemployed or underemployed, and angst over the future seems to be the national mood.
"Flying is getting more expensive, there is no question about it," Robert Herbst, a former commercial pilot and independent airline analyst, told The New York Times. "These rising energy costs have to be passed on to consumers. For some, this means flying will become less affordable."
Flying to Disney World might not be a viable option. As Herbst indicated, a world of higher fuel prices and higher fees might substantially change the way passengers think of air travel. It will become less a convenient mode of mass transportation and more a luxury.
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