Home    Flights    Hotels    Cars    Destination Guides    Travel News     
  View/Cancel Reservation    Help with Existing Reservations    Low Price Guarantee!    FAQs    Contact Us

 Airline Capacity Cuts May Mean Higher Fares
June 12, 2009

Plans by major US airlines to reduce the number of seats they sell may bolster fares later this year, further propping up prices that dropped this year as economic weakness drained travel demand.

Delta Air Lines and American Airlines said they would cut their capacity deeper than previously predicted. The capacity reductions are expected to kick in after the peak summer travel season.

"When they do kick in, I expect price points to move up a bit," said Rick Seaney, chief executive of FareCompare.

"It's about competition," he said. "So the routes that are losing the seats are the ones that are going be boosted, and the ones that continue to have excess capacity are still going to have really good deals."

Delta said it would trim system capacity by 10 percent this year, with reductions beginning in September. Previously, it said its system capacity would be down 6 to 8 percent.

American Airlines said it would cut capacity by 7.5 percent this year, compared with a previous forecast for a 6.5 percent decline. Other airlines signalled their intention -- or at least their willingness -- to cut capacity.

The airline industry, battered severely last year by high fuel prices and later by falling travel demand, rapidly downsized to offset its two heaviest burdens. But the carriers were largely unprofitable in the first quarter despite a sharp decline in fuel prices in the second half of 2008.

Now, as airlines face a new rally in oil prices and demand remains tepid, experts say they must once again cut their capacity in hopes of charging more for tickets.

Earlier this year, average fares slipped thanks to deep discounts and seasonal sales that lasted longer than usual. Prices since then have begun to stabilise, Seaney said.

"If you look at a two- or three-year history, it's not terribly low right now, but there's a lot of sale fares still thrown in the market," he said.

Capacity cuts already in place have helped airlines keep planes full, even if fares remain somewhat depressed, said Terry Trippler, a travel opinion writer.

"Planes are still going to be somewhat full again because capacity is down," Trippler said. "But the airports are going to be a little lighter so the hassle factor is going to drop substantially."

 Previous article. Latest travel news. Next article.
 Discount Flight Search
Select your destination and browse the great discounted airfares.
Departure City:
Arrival City:
  Advanced 

 Discount Hotel Search
Search for hotels and pick up the lowest price on the web.
Destination City:
  Advanced Search 

 Discount Car Search
Search for car availability and check rates from different rental companies at nearly every major airport.
Pick-Up City:
 

 Quick City Guide Search
Get recommendations on attractions, restaurants, and hotels, and up-to-date weather, health tips, and general information for thousands of destinations.
Search for a City:
  Browse Countries 
 Bookmark Travelix.com!

To bookmark this web site press CTRL+D

 Read more about:

Caribbean

Las Vegas

Paris

Scared of commitment? Don't worry, we guarantee we have the lowest Special Internet Rates online. If you find a lower rate, we'll take care of you.
 Read more about it.

This offer valid for stays booked by February 29, 2004 for travel through March 31, 2004.
 Read more.
  Low Price Guaranatee!    Terms and Conditions    Privacy and Security    FAQs    Contact Us
  ©2000-2003 Travelix.com. All Rights Reserved.
  All trademarks are property of their owners.