Ouch!  What Happened To Airfares?


I guess I haven't been paying attention recently to the price of air travel.  Fares seems to have skyrocketed, or at least my experience booking three recent itineraries point to that.


Example one:  Back in November I bought a ticket to fly in early December on AA from Raleigh to Madison, Wisconsin for just over $300 round trip.  Then my son had an emergency appendectomy the night before I was supposed to travel, and I had to cancel that trip.  AA was kind enough to issue me a travel voucher for the full amount due to the medical issue (it was a nonrefundable fare, of course, as virtually all are these days), but when I re-booked the itinerary 6 weeks in advance for travel in January, the fare was $462 round trip, a 50% increase.  


I thought maybe it was a fluke for the days I chose to fly, but shopping around on different days and weeks, I couldn't find anything better.


Pardon me, but paying almost $500 for a nonrefundable ticket to fly to Madison from Raleigh and back is excessive.  I mean, who wants to fly to Madison?  UW is a fine university, but aside from a few cool student hang-outs and some decent places to hear live music, Madison leaves a lot to be desired.  Especially in the winter, when temps are frequently subzero and the snow flies abundantly.   (My excuse: I have dear friends there.)


Example two:  Every year for 20 years my family flies Raleigh to Billings, Montana in June, July, or August to spend a week with my wife's parents, who have a rustic cabin in the Beartooth Mountains north of Yellowstone.  Air fares are always a bit high because there are no low cost carriers like Southwest yet serving Montana with enough capacity to drive down prices.  Usually we could find a fare on Delta or Northwest for about $450 round trip per person.  


Last summer (post DL/NW merger) we noticed fares had risen to just over $500, so I steeled myself when booking for this coming summer.  I was unprepared, however, for ticket prices that started at $622 (lowest price).  No matter what date I tried, tickets were $600 or higher.  I think a 20% increase in one year is extraordinary, especially considering the Fed reports there is little inflation.


Third example:  In December, at the height of high season, my family flew to St. Thomas en route to Maho Bay Camps in the St. John National Park.  I bought the tickets last summer for under $500 each.  We enjoyed the experience so much that we decided to return this June in the low season when practically no one visits the U. S. Virgin Islands.  Maho Bay accommodation prices, for example, are at that time half what they are in December.


Apparently no one told the airlines, though, that it's the LOW season.  When I checked air fares, they were $650-700 minimum between Raleigh and St. Thomas in mid-June.  It's possible to beat the system by buying two separate tickets, one Raleigh to JFK, and a second one JFK/STT, and pay $500 total.  But it's risky because if you miss the illegal connection, you lose your money.  


I decided instead to spend 200,000 Delta frequent flyer miles for 4 award travel tickets to St. Thomas in order to save $2700.  Seems like a lot of miles, though, to relinquish for such a short distance.  200,000 FF miles used to buy two first class tickets to Europe (first class, mind you, not business class).


Thinking maybe my experiences were anomalies, I asked around in the travel game to understand why the cost of flying to St. Thomas in June would be higher than in December, and why flying to Madison in midwinter is so expensive, and why flying to Billings has risen 20% in one year.  One professional travel planner's answer: "Because they are AIR FARES, and with less competition these days, the airlines can charge what they want."  


That reference was to the current AA bankruptcy (leaving it, for now at least, a weak competitor), the United/Continental merger, and the Delta/Northwest merger, all events which, he maintains, have diminished competition in many markets, allowing airlines to raise fares more indiscriminately than they've been able to get away with in the past. 


He said other factors have contributed, too, to the airlines' ability to raise fares.  There are still many airplanes parked due to the recession, and that means fewer frequencies even in city-pair markets with less competition.  Demand for flying has crept up faster than airlines have brought planes and crews back in service.  And steadily rising jet fuel prices (no inflation?) has been a good marketing tool to the public to justify higher fares.


Apparently higher fares aren't sticking in every burg and crop-dusting station, but they are working in a lot of places where frequencies are few and where Southwest doesn't fly.  Too bad for me, for instance, that Southwest doesn't serve Madison, Billings, or St. Thomas.  Presumably, that's one reason why Delta just announced record quarterly profits.


The upward trend of fares is not limited to domestic flying.  Twice in the past year I bought tickets Raleigh to Johannesburg, South Africa.  The fares were around $1400 round trip both times.  Checking fares RDU/JNB for June, the best I could find was $1800, 29% more.  I can only hope for a sale before summer.


But even at $1800, it's one-third the cost per mile to fly to Johannesburg (8,807 miles each way, or $0.10/mile) than paying $500 to Madison (753 miles each way, or $0.33/mile).  


While admitting that I hit a perfect triple whammy of destinations where air fare increases have been unusually high, it feels like a general trend to me, with fares going up far faster than inflation.  If so, it will put a crimp in our family's ability to travel as much as we'd like, and as as much as we have in the past.