Are Nightmare Airfare Hikes Coming?

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One of my employees is flying cross-country this month, a quick trip to a travel trade show in Orlando. "Holy cow," she said, after pricing airfare. "This is going to cost you a bundle, boss."

Go ahead, I said, shoot the works. The "works" as it turned out, was almost $500 roundtrip.

Now, it probably would have been at least a little cheaper if she wasn't flying on a Sunday (the cheapest days to flyare usually Tuesday, Wednesday and Saturday), and if she had the time to take a connecting flight as opposed to a nonstop, but -- well, sometimes you gotta fly when you gotta fly.

So, as noted, that airfare is nearly $500. Not cheap, but get used to it. Especially around the holidays. There are some indications of nightmare airfare pricing ahead. Some. But there is hope, too. Let me explain (and also tell you how to keep costs down).

For more air travel news and insights visit Rick's blog at: http://farecompare.com

Recently, I've noticed some ominous signs for consumers from the airlines:

1) Prices Trending Up -- Airfare prices right now for the cheapest roundtrip domestic travel this fall are up about 16 percent from last year, and up as much as 20 percent for travel to and from smaller cities.

2) Airfare Hikes -- Southwest instituted an airfare hike in August, for all of its routes (a hike quickly matched by other carriers); true, it was a small hike -- between $6 and $10 roundtrip -- but it was a price jump nevertheless, in a year where we've seen very few of those.

3) Fee Hikes -- AirTran recently raised its first checked-bag fee by $5 each-way.

4) Business Travel Momentum -- Corporate travel is trending up after more than a year of being in the dumper.

Let's dig a little deeper.

As for the bag fee jump, AirTran clearly thinks enough people will pay that extra five bucks (or $10 roundtrip). If you're keeping score, Delta kicked off this trend by raising its checked-bag fees around the first of the year, quickly followed by Continental and United.

Cheap Airline Tickets

Now what about ticket prices moving up? Well, the fact that airfare is so much higher than last year would be downright chilling, except you have to remember that prices were unusually low last year. Face it, the airlines had two incredibly rough years, thanks to soaring oil prices in 2008 and the global economic meltdown. Now they're returning to some sort of normality.

And it's working: most airlines are doing much better this year financially, but they're still very worried about the economy and the lingering possibility of a double dip recession. This prospect alone should keep ticket prices in check -- especially for leisure travelers who are watching their wallets like a hawk.

While I don't think we'll see any insane price jumps, on the flip side we won't be seeing any insane bargains either.

Bottom line: prices are creeping upward this fall.

And yet… fall is the slow period for airlines. For domestic travel, you will find some relative bargains and if you've put off a summer vacation, now is the time to go. Look at September or October and even up 'til mid-November. If you plan carefully and are flexible, meaning you fly the cheapest days and fly the cheapest times of day, as well as follow an airfare sales and deals blog, you could wind up with a roundtrip coast-to-coast flight in the low $200's.

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