Airlines continue to cut flights, keep airfares up
— -- Don't look for an empty middle seat on a flight anytime soon. And don't hold your breath waiting for a cheap fare.
Airlines are paring flights on some routes this fall as well as into next year in the face of high fuel prices and an uncertain economy.
Among the cuts:
•Delta said last week it would reduce available seats up to 5% from October through December compared with the last three months of 2010, and cut them by 2% to 3% in 2012 compared with this year.
•American made reductions on Tuesdays, Wednesdays and Saturdays by up to 4% starting in August. Last week it said it would cut available seats for the final three months of the year by roughly 0.5%.
•United and Continental, which are merged, say the combined airline continues "to refine its capacity plans," and reductions likely will be 2% to 3% for domestic flights for the year.
Airlines say they must be careful not to fly with more seats than they can fill at a time when fuel costs are high and fretful travelers could postpone trips because of a still struggling economy.
"We've seen very strong bookings," says Eric Torbenson, a Delta spokesman. Delta is cutting back on its flights, he says, as a way of being "cautious about fuel prices."
Matthew Jacob, senior airline analyst for ITG Investment Research, says passengers have fewer options after several airlines have merged in the last three years.
The carriers realize that reducing seats lets them boost fares along with their bottom lines, Jacob says.
"Lower supply means higher prices," he says, noting that planes on average have been flying 80% to 90% full. "Paying more to fly on fuller planes is going to be the norm for at least the next couple of years," Jacob says. "I think the days of lying across a row of three empty seats on a transcontinental flight are really behind us."
Airline ticket prices have been on the rise. Fares increased 1.1% in August, the biggest jump since March, according to the Bureau of Labor Statistics. For the 12 months ending in August, fares rose 9.5% over the same 12 months before.
"Strong passenger demand seems to be defying the daily economic headlines," says Rick Seaney of FareCompare.com. "Couple that with fewer seats for the rest of the year and you have a recipe for higher ticket prices."
