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Air fares going up as gas prices rise

DALLAS — Airfares are up and headed higher this summer.

Airlines blame soaring fuel prices which could cost them billions more than last year. That means fares, which normally rise as the summer travel season nears, could increase faster than usual.

Airlines have already pushed through two price increases this year, and it’s only February, when leisure travel is slow.

It’s a sign of things to come.

“You’ll see gradual increases and then a much bigger jump in April and May when people start shopping for the summer travel season,” says Rick Seaney, CEO of travel website FareCompare.com.

The latest data on average fares shows that Southwest charged $140 each way during the fourth quarter, JetBlue charged $156 and United Continental charged $270. Length of flight accounted for most of the difference — on a per-mile basis, prices were similar.

The average fare rose 9 percent between January 2011 and January 2012, according to Airlines for America, a trade group of the biggest carriers. Fuel is driving the increases. The spot price of jet fuel rose 18 percent over the same period, according to government figures. Airlines burn 48 million gallons per day, making fuel their biggest expense.

There’s little that airlines can do about fuel prices. They hedge, which is like buying insurance against big price spikes, and they’ve been adding more-efficient planes, but it takes years to replace a whole fleet.

The simplest response is to raise fares — that’s what they did nearly a dozen times last year.

Airlines will respond to higher fuel prices this year by boosting fares, running fewer sales, and cutting some flights, predicts analyst Michael Linenberg.

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