- The Washington Times - Monday, July 31, 2006

Antonio Rios considers himself lucky he bought airline tickets for his family vacation to Spain back in March, when fares were lower.

“With a family of four, it’s getting more difficult,” said Mr. Rios, a financial consultant from Alexandria.

Leisure fares are about 9 percent higher than at this time last year and business fares are up 18 percent, according to Harrell Associates, a firm that tracks airline fares.

“If they go up 25 percent, that would be a deal breaker,” said Mr. Rios, as he and his wife pushed their two children in strollers yesterday through Ronald Reagan Washington National Airport.

Instead of a summer trip to visit his parents, “I would look for something in the off-season,” he said.

Beginning with Delta Air Lines last week, major airlines are raising their fares for this summer’s peak vacation season in August.

Airlines kept fares low through 2005 to ensure they did not lose too many customers during their lean years after 2001, according to industry analysts.

Their flights operated with an average of 70 percent of the seats filled with passengers in 2001.

Now, with commercial flights averaging 85.3 percent full in June and fuel prices rising, most airlines are once again daring to make their customers pay more for a flight.

High fuel prices are adding to airlines’ need to raise fares.

“The revenue climate should remain healthy for several months to come,” said John Heimlich, chief economist for the Air Transport Association, an airline industry trade group. “Whether revenue gains are from price or volume remains to be seen.”

The financial outlook for airlines now indicates further fare increases cannot be ruled out as a possibility.

Mr. Heimlich would not speculate on how high fares might rise, citing federal antitrust law restrictions.

Industry analysts said they doubt moderately higher fares would hurt the airline business.

“So far, there appears to be little falloff in demand with higher fares,” said Ray Neidl, airline industry analyst for the financial firm Calyon Securities. “Load factors are still very high and advanced bookings strong.”

Travel agents suggest passengers make wider use of travel agents and reserve their tickets in advance to find the best deals as fares rise.

“Some travelers who historically have traveled on totally unrestricted fares now consider excursion fares that are significantly less,” said Tom Ollinger, president and chief operations officer of Arlington-based EWA Travel.

Most leisure travelers at Reagan Airport said they would keep an eye on airfares but have not yet changed their minds about traveling.

“It doesn’t look like it’s gone up too much yet,” said Vince Olshove, an Air Force radio technician who was in Washington visiting friends.

He paid $340 for a round-trip ticket between his home in Shreveport, La., and Washington.

Fares would have to rise “maybe $75 or $100” before he would have changed his plans for leisure travel, he said.

Business travelers who receive expenses said that higher fares are not a deterrent to flying for them.

“My company picks up the cost,” said Jen Hutchison, a College Park hearing-aid manufacturer’s account manager, who was traveling to Tampa, Fla., to meet with clients.

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