Air travel costs rising
What do Mickey Mouse and Moammar Gadhafi and a broken Japanese nuclear reactor have in common?
That is, if your family wants to visit Mickey at Disney World this summer — or vacation anywhere else, for that matter — you'll be paying more to fly. And two reasons for that are:
Higher jet fuel prices. Those are being driven by oil market fears about Middle East unrest, especially Gadhafi's bloody fight to stay in power in Libya.
A plunge in demand for airlines' lucrative flights to Japan. The country, a major gateway to Asia, isn't exactly inspiring travel as it struggles to help tsunami survivors and deals with the radioactive leaks of an earthquake-ruptured nuclear plant.
Susan Wiggins of Omaha is feeling glad to have locked in fares just after Christmas for a late-spring trip with her grandchildren to Disney World in Florida. She and her daughter, Kaylee Cornick, will be flying with four kids, ages 9 to 11, and began shopping online for good flights in October.
“We were a little leery about it,” she said. “We watched it and watched it.”
High on their priority list: flights at the right time of day. After all, who wants to spend precious vacation time sitting in airports?
When they finally spotted what they wanted for $353 a person round-trip, they grabbed it, Wiggins said.
That fits with the advice AAA Nebraska is giving, said spokeswoman Rose White. Although summer fare sales still might come along, she said, travelers needing specific dates — especially for a family or large group — are urged to book early.
Fares are up, but less so for flights out of Eppley Airfield than elsewhere, said Steve Coufal, Omaha Airport Authority executive director.
White agreed. An Omaha-to-Orlando fare, for example, is up about $30 from the same time last year, she said. Fares on most U.S. flights have risen about $70 in just the past three months, according to FareCompare, a ticket-shopping website.
The falloff in bookings since the March 11 earthquake has affected even airlines that don't fly to Japan, said Scott Kirby, president of US Airways. He told an investor conference in New York this week that the quake effect was “psychological” and that underlying demand for flights was reasserting itself.
For now, though, several airlines are shrinking their schedules, because fewer flights saves fuel and keeps more seats filled with paying passengers.
Again, Omaha has been spared, Coufal said: Eppley flights were up about 4 percent in January and 2 percent in February compared with the same months in 2010, even though February snowstorms canceled some flights. March's numbers should be similar, he said.
Airlines' hopes are flying high for 2011. In spite of the run-up in jet fuel — a nearly 50 percent price increase since September — 2010 was airlines' first profitable year since the pre-recession days of 2007. They had hoped to build on that this year by flying more passengers, especially big-spending corporate travelers jetting through business hubs such as Tokyo.
Instead, air travel via Japan has shuddered. It's not that no one is flying, it's that they are doing most of it one way: out.
The number of foreigners flying out of Japan shot up eightfold in the 12 days after the quake, from about 20,000 in that period last year to 161,300, said Taichi Iseki, an immigration official at Narita, Japan's main airport. Meanwhile, the number of foreigners arriving at Narita plunged by 60 percent, to 33,400.
Delta, the U.S. airline with the most traffic to Japan, said this week it would cut flights to that country by 15 to 20 percent until June, sacrificing up to $400 million in profit it once hoped for.
Delta has led four of the industry's fare hikes this year, yet “pricing alone won't cover the dramatic rise we've seen in fuel prices,” President Edward Bastian told the investor conference in New York. In spite of its reduced schedule, Delta expects to spend $3 billion more on fuel this year than last.
This week, United Continental, US Airways and Delta raised fares on most U.S. flights by about $10 per round-trip. If the higher prices stick they would be the latest in a string of increases — nearly one a week this year, said Rick Seaney, CEO of FareCompare.
Seaney said the pattern seems like 2007 and 2008, when jet fuel hit a record price and air fares followed along.
Bastian, Delta's chief, predicted the decline in passenger traffic would be “somewhere between a six- to nine-month, one-time event,” putting normal bookings within reach this fall.
The CEO of Southwest Airlines, Gary Kelly, also voiced optimism that neither earthquake psychology nor higher ticket prices would seriously suppress demand. Kelly said his Dallas-based airline still planned to increase capacity about 5 percent this year.