A summer vacation involving a flight might come with sticker shock this year. The reason: Domestic U.S. airfares are surging as airlines reap the benefits of industry consolidation and big capacity cuts amid a backdrop of rising fuel prices.
Airlines have pushed through three fare increases so far in 2012, following nine hikes in 2011 and three in 2010, according to data compiled by FareCompare.com, a Dallas-based fare-tracking company. The average domestic fare was $470 in the fourth quarter of 2011, according to data from Airlines Reporting Corp. That’s approaching the $488 the industry achieved in the last three months of 2007, before the U.S. housing bust and subsequent financial crisis pinched fliers’ ability to spend on travel. (Average fares dipped to $385 in the spring of 2009.) ARC handles settlement transactions between airlines and travel agents, accounting for about half of all North American ticket sales. The cheapest average round-trip for flights among the 50 largest U.S. cities was at $362 on March 30, nearing the $368 high reached in March 2011, when oil had again surpassed $100 per barrel, according to FareCompare data.