»»Consequences of a Slowing Business Travel Demand on U.S. Domestic Airfares
It seems U.S. domestic fares are falling back as a consequence of a slowing in the demand for business travel.
Richard Leonard, who tracks airline price trends for the U.S. Department of Transportation’s Bureau of Transportation Statistics, on The Atlanta Journal-Constitution says:
“You’re … seeing a slowing in business travel. Planes are nearly full, but it’s because there are lots of leisure travelers.”
The newspaper, citing a report of the U.S. Department of Transportation, says the average fare in the 100 largest U.S. markets in the last quarter of 2006 was up 3.4 percent compared with a year earlier.
…That compares to about 15 general increases in 2006, as airlines achieved a rare unity in the face of higher fuel costs. Historically, the industry has had trouble passing along higher costs via fares, because if only one significant competitor doesn’t go along, fare increases collapse.
Airlines “pretty much had a banner year last year,” said Rick Seaney, chief executive of FareCompare.com, a Dallas-based consulting firm that tracks fare trends online. This year, airlines have had a harder time getting price increases to hold because of softening demand, he said.
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