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Published: Tuesday, 5/17/2011

Air travel predicted to rise despite fares

ASSOCIATED PRESS

DALLAS — An airline industry trade group says that even with higher fares, more people will fly this summer than last year, especially overseas.

The Air Transport Association said Monday that it expects 206 million passengers will travel on U.S. airlines in June, July, and August, a 1.5 percent increase over the same months in 2010.

If the forecast is right, travel will remain below prerecession levels. In 2007, U.S. airlines carried a record 217 million summer travelers.

The airline trade group expects minimal growth in domestic travel this summer, but a record 26.3 million passengers on international flights operated by U.S. airlines, topping 2010’s 25.8 million. The group said that’s partly due to stronger economies outside the United States. And, while driving is an option for trips in this country, Americans fly to get to Europe or Asia.

Airlines have raised fares over a half-dozen times this year to cover a 30 percent rise in fuel prices. The average round-trip domestic fare last summer was $340, according to government figures. It could be $375 or more this summer if fares rise again as much as they did last summer. That’s not counting fees passengers might pay for checked bags, roomier seats, and other items.

Some airline executives publicly have wondered how much more consumers can take. John Heimlich, chief economist for the air-transport group, noted that passenger revenue rose in the first quarter, which he said indicates people are willing to travel at the higher fares.

Helane Becker, an analyst with Dahlman Rose & Co., said that because most leisure travelers book in advance, higher fares caused some to plan Memorial Day trips that didn’t involve flying.

U.S. airlines lost $1 billion in the first quarter of this year. Still, if summer travel matches forecasts, and if the recent drop in oil prices sticks, the airlines are likely to avoid a repeat of 2008, when record fuel prices spurred talk about which airlines were most likely to go bankrupt.



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