U.S. airfares forecast to jump 1%
Price hike, attributed to high demand and fuel costs, would come after years of decline.
Over the last few years, airfares for domestic flights in the U.S. have been on the decline, dropping as much as 7% a year. But that trend may be coming to an end.
A forecast by a global travel consultant predicts airfares in North America will inch up by 1% this year, while hotel rates will jump 2% to 4%.
BCD Travel, a consultant that works with corporate travel managers, attributed the increase to strong demand for air travel and rising fuel costs. The percentage of filled seats on each flight — known as the load factor — has also been near record-high levels.
“High load factors may encourage airlines to pursue the fare increases they need to offset rising fuel and labor costs,” the forecast said. “Prices are climbing slowly in the markets with the strongest demand.”
BCD predicts that hotel rates will rise modestly this year partly because of the increased pace of new hotel construction, especially among mid-scale and upscale tiers.
“Demand has been steady but not spectacular,” the report said.
BCD’s fare forecast is directed at corporate business travelers who often get special group rates, but industry experts say corporate rates generally parallel fares for regular travelers.
Data from the Bureau of Transportation Statistics show that the average domestic airfare dropped from $392 in 2014 to $377 in 2015 and $349 in 2016. For the first nine months of 2017, domestic airfares dropped to an average of $348, according to the federal agency.
Industry experts say predicting future airfares is difficult and is based on many changing variables.
Joe Brancatelli, a columnist on business travel, said if fares rise at all, it won’t be by much because airlines are adding seats and planes at a high rate, which tends to push fares down. As for fuel prices, he said: “No one knows what fuel prices are going to be.”
The trade group Airlines for America declined to comment, saying it is prohibited from discussing future fares.
United’s brand dives after dog’s death
United Airlines’ reputation is in the dumpster after yet another customer-service blunder, but the good news for the carrier is that the fallout is not as bad as last time.
United has worked hard to rebuild its reputation after security agents dragged a passenger off a flight to Louisville, Ky., last year. But the airline’s brand was struck by another blow this month: A dog died after a flight attendant ordered it be stowed in an overhead bin during a f light from Houston to New York.
United’s favorability rating has been monitored by a brand-tracking consultant, Morning Consult, which has surveyed 162,132 people about United Airlines from Jan. 16, 2017, to last Tuesday. The survey asks people to rank brands on a scale from negative 100 to positive 100.
After Chicago security agents dragged passenger David Dao off a United flight in April 2017, United’s rating dropped a whopping 47 points, according to Morning Consult. Dao suffered several injuries when he was forcibly removed from his seat, which he refused to give up to crew members who needed to be in Louisville the next day.
In the 11 months since the Dao incident, Morning Consult’s data show, United Airlines’ reputation began to improve slowly, even though it has lagged seven to 17 points behind rivals American, Delta and Southwest.
But United’s reputation took another nosedive after news March 12 that a French bulldog died after the owner was forced to put the dog carrier in an overhead bin in Houston at the start of a flight. United said later that the flight attendant was not aware that a dog was in the pet carrier — a contention strongly disputed by the dog’s owner.
The airline, which also admitted to shipping mishaps that involving two other dogs in the four days after the bulldog died, saw its reputation drop 28 points after the latest incident, according to Morning Consult.
Still, after Dao was dragged off the plane, 44% of the people who had heard about the onboard dispute told the brand tracker that they would sacrifice both money and time to avoid flying with United. But after the latest pet-related scandal, only 25% of those questioned said they would avoid United.
A representative for United declined to comment on the survey.
$10,000 to give up a seat? You betcha
The smartphone video that went viral last year showing Dao being dragged out of an overbooked United flight prompted several large airlines to vow to dramatically reduce the number of passengers denied a seat.
The nation’s airlines have made good on that promise.
The country’s top carriers reported last year the lowest rate of passenger bumping dating to when the Bureau of Transportation Statistics began tracking the data in 1995. The rate dropped to 0.34 f lier bumped for every 10,000 passengers last year from 0.62 flier bumped in 2016.
For its part, United demonstrated last week how far it will go to avoid another embarrassing incident involving an oversold flight.
United Airlines confirmed that it offered passenger Allison Preiss a $10,000 voucher toward future flights to give up her seat on an overbooked flight Thursday from Washington Dulles International Airport to Austin-Bergstrom International Airport.
Preiss, a communications manager for the Center for American Progress, chronicled her plight via her Twitter account, noting that she was chosen to give up her seat because she had paid the lowest fare on the plane.
After negotiations with Preiss, who played hardball and asked for cash to voluntarily give up her seat, United ended up offering her a $10,000 flight voucher, according to the airline and Preiss’ Twitter posts.
Preiss told her Twitter followers that United also gave her two $10 food vouchers but refused to give her free access to the airline’s VIP lounge.
She joked about using her food vouchers to “go nuts” at an airport Pizza Hut but later posted that she decided to skip the pizza after all.