Airfares Bank Sharply Higher

Reducing the number of cheaper seats on each flight is a common way many airlines are able to get higher revenue without having to raise their fares.
Reducing the number of cheaper seats on each flight is a common way many airlines are able to get higher revenue without having to raise their fares. (Jorge Silva - Reuters)
By Keith L. Alexander
Tuesday, February 28, 2006

For more than a year, the consultants at A.T. Kearney in Old Town were accustomed to paying about $100 for a round-trip ticket from Washington's Dulles International to such cities as Chicago, Atlanta and Orlando.

Now, those fares have increased to as much as $300. And A.T. Kearney employees who have to take business trips must now look for cheaper fares out of alternative airports, such as Reagan National or Baltimore-Washington International Thurgood Marshall.

The fare increases are owed largely to the January demise of Independence Air. Travel experts predicted that the grounding of the discount carrier would send fares up, but few expected the increase to happen so quickly. Even some of the nation's so-called low-fare carriers are increasing their ticket prices.

And even those airlines that have year-long, negotiated contracts with A.T. Kearney are now trying to change their contracts to raise rates, blaming the increases largely on higher fuel prices.

"The airlines are really being bold, even with agreements right now. They're all really pressed to get their revenues up as much as they can," said Jim Haddow, A.T. Kearney's chief procurement officer.

It's been nearly two months since Independence Air closed its doors on Jan. 5, and Washington-area travelers already are noticing that fares have doubled to some markets. Industry observers expect fares to increase even more during the spring and summer travel periods when travel demand is stronger.

Here's a glimpse of published walk-up, round-trip fares from Dulles between Jan. 6 and Feb. 22, according to a review of airfares by fare expert Terry Trippler of

· Pittsburgh has increased to $900 on United Airlines and US Airways, from $228 on Jan. 6.

· Nashville has increased to $458 from $118 on United.

· Charleston, S.C., has increased to $648 from $198, also on United.

United, which has the most flights in and out of Dulles of any airline, has been the fare-increase leader, according to Trippler. United's fare hikes are striking, given that Dulles is a United hub and that United is the only airline offering nonstop flights out of Dulles on these routes. "You shouldn't have to take out a home equity loan to fly up to Pittsburgh and back on the same day," Trippler says.

United spokesman Jeff Green said the lower fares were "artificial" and not "sustainable" long-term, ultimately part of the reason for Independence Air's financial troubles. But Green argued that the airline has not increased its fares more than $15 to $20. The much-higher fares were found quicker because there are fewer discounted seats and those tickets sell out quicker, he said.

Reducing the number of cheaper seats on each flight is a common way many airlines are able to get higher revenue without having to raise their fares. JetBlue Airways, which flies out of Dulles, acknowledges it has done so as it tries to cover higher fuel costs, said JetBlue spokeswoman Jenny Dervin.

Southwest Airlines, which is the dominant carrier at BWI, said Independence's shutdown has led to higher passenger levels on its BWI flights. And greater demand means the cheaper seats sell out quicker, especially on more popular routes. During the third quarter of 2005, Southwest saw its passenger loads increase as much as 3 percent compared with the corresponding period of 2004. During the period systemwide, its passenger loads increased only 2 percent.

"A lot of the traffic that has leaked away from BWI has come back," said Gary C. Kelly, Southwest's chief executive officer. "We were seeing revenue declines in the early part of 2005, but now we're seeing healthy gains at BWI that we're pleased with." Kelly said Southwest plans "modest" fare increases in the coming months.

Bed Bugs in Australia: If you're traveling to Australia anytime soon, there's something you definitely don't want to bring home with you. Numerous hotels -- from economy to luxury brands -- are reporting an outbreak of bed bugs in recent months. The outbreak has cost the industry about $100 million a year in cleaning, according to a study by the Institute for Clinical Pathology & Medical Research at Sydney's Westmead Hospital. The wingless, brown insects nest in mattresses, under floorboards and in carpets. Signs of infestation include skin rashes and blood spots on mattresses. Here in the United States, Manhattan exterminators have reported an outbreak of bed bugs in homes and hotels in recent months.

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