High fares to cut into summer air travel

An industry group says fewer passengers will fly, but planes will still be crowded because of reduced flights to save money as fuel costs rise.

NEW YORK (CNNMoney.com) — Fewer people will fly this summer, according the Air Transport Association, and those who do should expect higher fares and crowded flights.

“I think that a rise in fares is inevitable,” said James May, president of the industry group ATA, speaking at a press conference in Washington, D.C. Tuesday.


May blamed soaring fuel prices. The ATA estimates that jet fuel costs will rise to a record-breaking $59.5 billion in 2008, compared to $41.2 billion in 2007. The cost of fuel currently makes up 36.5% of the price of a ticket, compared with 15% in 2000, according to the ATA.

May would not estimate how much he expects fares will rise. But Philip Baggaley, fixed income analyst at Standard & Poor’s, said the airlines won’t be able to push them up much further.

“We believe that it’s going to get harder and harder to increase fares because of the weak economy and the fact that there have already been a series of fare increases,” he said.

CNNMoney.com