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VIDEOAirfares Drop As Mercury Rises
By
Scott Reeves Mar 30, 2009 12:50 pm
But watch out for "unbundling" services.
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The decline comes despite a recent uptick in oil prices. The savvy traveler might want to book now because fares typically rise with increased demand during the summer.
Sabre, a privately held computerized reservation system, conducted a review of summer prices for USA Today and found that the average roundtrip domestic airline ticket this summer costs $340, or 2% less than last year. Sabre’s review included reservations made prior to May 31 for travel in June, July and August.
Ticket prices rose last summer because many airlines reduced the number of flights in the economic slowdown, but demand rose. Some airlines have added flights this summer and that may moderate any price increases.
But keep in mind that most airlines now charge for services that were once free, including checking a bag, beverages, blankets, seat selection or even changing planes. The new fees can increase the overall cost of your travel.
The airline industry calls the new fees “unbundling.” The new pricing will give travelers lower base fares with the option to buy only the extra services they want.
Unbundling isn’t new. Cable companies have used the tactic for years to offer premium movies, sports and pay-per-view events for an additional fee. Airlines believe unbundling services will allow them to boost revenue and offset higher fuel prices.
United (UAUA) says planned fees will generate about $700 million a year. Northwest (NWA) says baggage charges will increase revenue $150 million to $200 million a year. Continental (CAL) looks to earn an additional $100 million from a new fee for checking the first bag - and that doesn’t include fees for additional baggage.
Ryanair (RYAAY), Europe’s largest budget carrier, has talked about charging a pay-per-pee fee while in flight, but so far hasn’t imposed it.
However, Southwest Airlines (LUV), a consistently profitable carrier, avoids most of the new fees charged by competitors and ballyhoos the fact in its advertising. But the carrier hasn’t ruled out some new fees in the future.
Which airline once plugged the “friendly skies”? No doubt the skies are still friendly, but the grin will cost you. Moral: shop around.
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