2012 Travel Advice "Book Early Prices will Increase"!

Fewer Flights, Less business-class travel and continued high fuel costs are likely to keep an upward pressure on airfares in 2012, experts say.

Industry observers think the percentage increases — nearly 10percent for this year nationally — are likely to level off, barring a big spike in oil prices. But they don’t expect fares to go down, and midsized airports such as Port Columbus probably will continue seeing a larger-than-average increase compared with large hub airports with more competition.

“Airlines have attempted 22hikes this year versus three last year, though only nine have stuck, mostly early in the year,” said Rick Seaney, the founder of FareCompare.com. “When hikes do stick, smaller cities tend to take the brunt of it, since they don’t have as much competition.”

Port Columbus has a good balance of airlines, with low-cost carrier Southwest and Delta leading the pack but each controlling less than 30 percent of passenger traffic. However, Southwest has raised fares nationwide after losing some advantages, such as the money it had saved from a fuel-buying plan that locked in lower costs compared with competitors, which has expired. It also has been focusing on higher-priced business travel, rather than on always being the low-cost leader.

At the same time, there’s less business travel taking place overall, and companies frequently are making workers fly coach rather than springing for pricier business-class seats.

The International Air Transport Association said this month that premium-fare travel “fell sharply” in October, while economy travel had single-digit increases in many markets, indicating that travelers simply are trading down.

So even though slightly more people are flying, airlines might be making less per passenger. Industry expert Joe Schwieterman said airlines used to offer lower fares simply to fill up planes. Today, following flight cuts in most markets, the airlines already are flying nearly-full planes and can’t look at fuller planes as incremental revenue.

“Pleasure fares have always been made possible by higher-fare business travelers,” said Schwieterman, an associate professor at DePaul University in Chicago and a former United Airlines pricing analyst. “There’s not much more room to make up for lost revenue through added load factor, so I think pleasure travelers will shoulder a higher portion of the costs.”

Seaney is skeptical that the airlines will be able to raise fares by much in the coming months, however, assuming people are still feeling the pinch of the long-languishing economy.

“As soon as you raise fares on people who fly coach, they start to make a decision about whether they’re going to fly or not,” Seaney said.

And second-tier markets such as Columbus and other Ohio cities have been seeing greater percentage increases in fares, as airlines focus on putting more flights through their largest hubs.

According to recent data by the U.S. Bureau of Transportation Statistics, Port Columbus fares went up an average 12 percent between the second quarter of 2010 and the second quarter of 2011, compared with an 8.5percent increase nationally.

The average fare at Port Columbus was $353, still less than the national average of $370.

Other Ohio airports are seeing the same trend: Cleveland, Cincinnati and Dayton all have had larger-than-average increases in fares this year.

With airlines flying fuller planes, “carriers are less apt to discount connecting flights,” Schwieterman said. “To them, you’re taking a seat on two segments.”