POSTED: 01:30 a.m. HST, Jul 27, 2010
Good times are finally back for the nation's airlines. For travelers, that means bargains are harder to find.
The summer travel season got off to a roaring start, fares are up and money is rolling in from fees on things like checked baggage.
The six biggest U.S. airlines earned about $1.3 billion in the second quarter, and more profits are expected for the rest of the year. Even so, airlines are still woozy from the one-two punch of record-high fuel prices followed by a recession. Those six carriers lost $22.7 billion in 2008 and 2009.
There were plenty of fare sales when the airlines were struggling to fill seats. Now those seats are in demand, so deals are less common. And travelers are paying for "extras" such as an aisle seat, checking bags and buying a ticket over the phone -- things that used to be part of the fare.
What to expect in the months ahead:
Airlines are hooked on fees after two years of using them to overcome high fuel prices and slumping demand. A new study shows that worldwide, carriers took in $13.5 billion from fees in 2009, a 43 percent jump in just one year.
United and American led the way on "ancillary revenue," including fees, at about $1.8 billion apiece last year, according to IdeaWorks, which conducted the study.
United Airlines President John Tague calls fees "an unequivocal success," and suggests his airline could still double the amount it's bringing in with baggage fees.
Everyone is watching to see whether travelers pay Spirit Airlines' fee of $45 for some carry-on bags on flights starting Aug. 1, although most of the big airlines have promised Sen. Charles Schumer, D-N.Y., they won't follow Spirit's lead.
Airlines have been able to boost ticket prices, too. Summer fares are up an average of 18 percent, according to figures from a trade group for the big airlines.
Planes are stuffed like never before. Delta filled 88 percent of its seats in June, Continental sold 87 percent and American 86 percent -- about 2 percentage points higher than last summer.
Normally when airlines start making money after a slump, they're tempted to add new flights to snag returning travelers. This time might be different. Sluggish bookings and concern about the weak economic recovery will put pressure on airlines not to add flights that might operate half empty.
Shares of Delta Air Lines Inc. were punished last week partly because the world's biggest airline said it would increase passenger-carrying capacity up to 3 percent next year. Too soon, investors seemed to be saying. If the airlines add too many flights, it will increase their costs and push fares down.
Several large airlines are in labor negotiations that could lead to higher costs and travel disruptions.
The most acute problems are at American, where flight attendants and some ground workers are talking openly about strikes this fall.
Unions at United and Continental need to work out a combined contract that will take effect if the airlines complete their planned merger. Delta faces unionization votes by flight attendants and ground workers.
Unions want to make up for past wage and benefit cuts. But whether that means they'll walk off the job and leave passengers stranded is another question. Federal law makes it hard for unions to strike.