Saturday, April 9, 2011

higher oil prices more expensive to fly

Airlines have used higher oil prices to justify ticket price increases of up to $60 per ticket since the start of the year. But the rising cost of fuel isn't the only reason it's getting more expensive to fly.
The improving economy, a shrinking supply of seats and industry consolidation are also to blame.
The most recent came Monday, when Delta raised fares up to $20 for a round trip and United raised them up to $10 for a round trip on most domestic routes. Most other carriers followed suit.
Even before turmoil in the Middle East drove oil prices higher, airlines tickets were more expensive. The average cost of a round-trip ticket on a U.S. airline was $360 before taxes at the start of 2011, a 9 per cent increase from the previous year. By summer that figure could reach $430, says Robert Herbst, an independent airline analyst.
American Airlines raised U.S. fares by $10 per round trip on Wednesday. If its competitors follow — as is customary — it would be the seventh broad price hike this year by U.S. airlines.
It isn't just the base fare getting more expensive. Checking bags, reserving an aisle seat and other services are no longer universally free.
Another change working against leisure travellers is the budding dispute between airlines and online travel sites. The airlines want to pay the sites lower commissions for each ticket purchased. The result for fliers: Not all available flights can be found on some sites. For instance, Orbitz, Expedia and Hotwire no longer list American Airlines flights.
"It's just more work for the consumer to figure out who has the best fare," says Anne Banas, executive editor of travel advice site SmarterTravel.
oil prices topped $3 a gallon last week and is now up almost 50 per cent from last year. Even if prices rise no further, airlines will have to raise average fares by 10 per cent just to break even, says Herbst.
Some high-traffic business and leisure routes, such as New York to Los Angeles, will see large hikes, Parsons says. The cheapest fare between those cities last July was $382. This year, it's $544. Parsons notes a handful of domestic routes, such as Dallas to San Francisco, are down thanks to new competition.
International routes aren't offering any relief, either. The cheapest available August flight from Miami to Paris cost $1,250 this week, 53 per cent higher than last year, according to SmarterTravel.
Vacationers looking for the cheapest tickets should aim to fly on Tuesday and Wednesday, the least busy days for the industry, Parsons says.
Booking hotel and air packages can also yield savings. Here's an extreme recent example found online: A trip to Las Vegas included two round-trip tickets on US Airways, three nights at the Excalibur hotel and two free show tickets, all for less than the cost of many round-trip fares to Las Vegas .

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