Thursday, March 30, 2006

Soaring Above High-Priced Airfares

News Analysis
March 30, 2006

Business Week Online

Soaring Above High-Priced Airfares

Ticket prices seem to go up every time you turn around. Here are some ways to get you where you're going without going broke

Planning to fly this summer? Rising airfares mean most trips will cost more than they did last year. But savvy travelers can still save money -- if they know where to look. Ticket prices are rebounding from their post-September 11 lows. For domestic flights, average fare revenue rose 10.6% in the first two months of the year, according to data from the Air Transport Assn.

Blame this on the rising price of jet fuel (see BW Online, 3/16/06, "A New Spike at the Pump?"). In recent weeks, even discount stalwart Southwest Airlines (LUV ) announced a fare increase. Other carriers like American Airlines (AMR ), United Airlines, Delta Air Lines (DALRQ ), Northwest Airlines (NWACQ ), Continental Airlines (CAL ), AirTran Holdings (AAI ), and US Airways (LCC ) quickly followed suit.

SAVVIER AIRLINES.  With peak travel season on the way, rates will move inexorably higher, industry watchers say. "Fares are going to go up one way or the other," says Edward Hasbrouck, author of the travel book series The Practical Nomad. Nor can vacationers count on last-minute deals. Short-notice fares became common in recent years because airlines underestimated demand, Hasbrouck says. They aren't expected to make the same mistake in 2006.

Still, a few tips can help travelers keep transportation costs grounded. This week's Five for the Money looks at how to spend less on airfare on your summer vacation.

1. Book early
With last-minute bargains out the window, buy tickets as early as possible. "Generally, you'll get the best prices that way," says Don George, global travel editor with Lonely Planet Publications. Getting tickets early doesn't just give travelers a chance at a lower price. It also might be necessary just to secure a seat. Major carriers trimmed their fleets after September 11, and some planes are still mothballed, industry watchers say.

That means increasingly full flights, especially on popular routes. "If you're flying transcontinental, Los Angeles to New York, you're going to have a full flight," says David Lytle, editorial director of travel information Web site

2. Shop around
When searching for fares, it's best to check a variety of sources. The big travel Web sites like Expedia (EXPE ), Orbitz, and Travelocity (TVLY) can be good places to get a general feel for what a trip might cost. A newer breed of travel Web site provides comparison shopping (see BW Online, 1/14/05, "Online Travel: All Over the Map"). Called aggregators, these "metasearch" sites include Kayak, Mobissimo, QIXO, and SideStep. "Aggregators sniff out different travel sites for the best rates," says David LaHuta, assistant editor with Budget Travel.

Be sure to visit individual airline Web sites as well. A few carriers, including Southwest, don't allow their fares to be published on third-party Web sites. At most airline Web sites, travelers can sign up to get e-mail notification when fares for a particular route drop.

3. Be flexible
With airfares rising overall, sometimes getting a good deal will require a change in plans. Lucky travelers who can take their vacations outside of peak seasons should fly in late spring or early fall to get the lowest rates. They'll also avoid the crowds.

For the rest of us, it's about location, location, location. Taking an alternate route can reduce fares considerably. The recently listed fare for a flight from Dallas to Memphis, Tenn., was $370, but it would have cost just $98 to land 130 miles west in Little Rock, Ark., according to CEO Tom Parsons. "Be creative," he says. Consider flying on alternate days. And don't blink at red-eyes. Travelers who can depart on Tuesday, Wednesday, or Thursday, especially late at night or early in the morning, will tend to find cheaper fares.

4. Bundle up
Buying a travel package is another way to save. Many Web sites -- including Expedia, Orbitz, and Travelocity -- allow travelers to combine airfare with booking a hotel (see BW Online, 03/02/06, "Travel Tips to Send You Packing"). A package can be an especially good deal for several people traveling together, including families. The savings can start to add up.

5. Keep checking
Airlines change rates frequently, so be on the lookout. Some industry watchers say the best sales are on Saturday mornings, while others say to check airline Web Sites early Wednesday for updates. If you spot a bargain, snag it.

Just because you've booked your ticket doesn't mean it's time to stop watching fares. A handful of carriers, including JetBlue Airways (JBLU ), will refund the difference if the price for a flight goes down after purchase. A $25 processing fee might be attached, and the refund probably won't be in cash, but it still might be worth an extra visit to the airline Web site. "Many airlines still quietly will give you a credit that you can use for the future," says Norie Quintos, a senior editor with National Geographic Traveler.

It's going to be a challenging travel season for deal hunters. But vacationers who think ahead will be in for a smoother trip.

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