As International Airfares Soar, Americans Stay in the U.S.

The days of flying to Europe for a long weekend are over for Diana Koziupa.

The Pennsylvania psychiatrist says she and her husband, Ken Swanson, flew to Europe three or four times a year but have stopped because of high airfares. They instead went to Oregon this summer on their first domestic vacation in years and are considering other trips stateside.

"Coach airfares for international flights are over the top," says the frequent traveler, who lives in Perkasie, Pa., about an hour's drive from Philadelphia. "Europe is totally out of the question for leisure and a remote possibility for business."

Travelers feel the pain of high domestic airfares, which rose this summer more than any year in the past quarter century. Meanwhile, many international tickets have risen to levels too steep for the budgets of many American vacationers and companies. That's translating into softer demand.

Growth of international passenger traffic worldwide slowed to a five-year low in July and dropped further in August, according to the International Air Transport Association, which represents 230 airlines. Passenger growth on North American airlines' international routes dropped to 4.2 percent in July and 5.2 percent in August, compared with 8.2 percent in May.

The cheapest round-trip coach ticket this fall -- an off-peak travel time -- costs more than $1,000 on 40percent of the 50 most-traveled international routes and more than $900 on half the routes, according to a study by at USA TODAY's request. The study included U.S. and foreign airlines.

Many travelers pay more than those fares, which require a Saturday-night stay abroad and are available for a limited number of seats. Without a Saturday-night stay, fares on more than a third of the most-traveled routes can be at least 50percent more expensive.

For example, for a trip between Chicago and Frankfurt, Germany -- leaving Sept. 29 and returning Oct. 6 -- the cheapest round-trip coach ticket with a Saturday-night stay was $669 on Air India when checked last month. Without a weekend stay, departing the same day and returning Oct. 3, the cheapest coach ticket was $2,021, or 202 percent more, on United, American and Lufthansa.

Fewer business trips

International business travelers often buy tickets without a weekend stay, and they're being hit hard by the high prices. For example, Don Jolly, vice president of sales for a California company, says he's taken three international business trips this year, but he would have taken six if fares were lower.

International fares for flights departing Sept. 29 and returning Oct. 6 were much higher than in the same 2007 period. The cheapest non-stop coach fare was at least 14percent higher on more than half of the 50 most-traveled routes and at least 20 percent higher on 20 of the routes. On five routes - Chicago-Toronto, Miami-Caracas, Venezuela, New York-Santo Domingo, Dominican Republic, Houston-Mexico City and San Francisco-Tokyo -- the cheapest coach fare was more than 40percent higher.

For a family of four, or four employees, traveling round trip in late September and early October, the cheapest San Francisco-Tokyo tickets cost $1,500 more than they did last fall.

High international fares include escalating fuel surcharges that airlines have imposed to combat record jet-fuel prices. Fuel surcharges on some round-trip international tickets now exceed $500 -- more than a 200 percent increase from last September.

"Many dream trips to Europe and Asia this past year have been postponed," says CEO Rick Seaney. "Amazingly, the base airfare cost is lower than the fuel surcharge on some transoceanic tickets."

On Sept. 25, for example, online travel agent giant Orbitz said the cheapest round-trip airfare -- leaving from New York's JFK airport on Nov. 11 and returning from London's Heathrow airport on Nov. 18 -- was $170, plus $479 in surcharges and taxes.

Northwest (NWA) Airlines spokeswoman Michelle Aguayo Shannon says, "With record oil prices, we have no choice but to try to offset these extraordinary costs with fuel surcharges."

Last month, for a flight departing Sept. 29 and returning Oct. 6 on the 50 most-traveled international routes, the most expensive fuel surcharge for the cheapest non-stop fares was $525. American (AMR) included that surcharge in its $1,280 New York-Tokyo and $1,300 Chicago-Tokyo tickets. In September 2007, American's cheapest non-stop tickets on those routes had a $150 fuel surcharge.

High Fuel Costs

American's fuel surcharges vary on each route depending on flight length and competition -- "the same reasons fares vary," says American spokesman Tim Wagner.

That's not always true among foreign airlines. Air France charges $165, and Lufthansa charges $105, on every one-way U.S. flight, regardless of length.

The fuel surcharge is "designed to only partly cover the increased cost of fuel," says Jennifer Urbaniak, a spokeswoman for Lufthansa, which flies to 18 U.S. cities. Fuel costs this year are expected to be about $2.5 billion more than last year for the German carrier, she says.

Airlines could raise fares to cover expenses instead of implementing a fuel surcharge. But carriers "get a marketing benefit out of blaming oil companies for high fares," Seaney says.

Air Canada said last month it was making prices "more transparent" by removing fuel surcharges for North American flights. The surcharges ranged from $20 to $60 per one-way flight.

On Sept. 12, studied the fuel surcharges for nearly 620,000 round-trip, transoceanic fares of 70 airlines. The study showed that:

• The 70 airlines' average fuel surcharge per flight was $349. The average surcharge ranged from $200 for German airline Air Berlin to $1,162 for Malaysia Airlines.

• The average fuel surcharge per flight ranges from $311 to $335 for the six big U.S. airlines flying abroad -- American, Continental, (CAL) Delta, (DAL) Northwest, United and US Airways. (LCC)

• Flights to and from Tel Aviv, Israel, had the most expensive average fuel surcharge: $500. Frankfurt, Germany, flights had the least expensive average fuel surcharge: $258.

Surcharges are necessary, says aviation consultant Michael Boyd, because a lot of fuel is burned on an international flight. At the recent price of oil, about $94 a barrel, a Boeing 777 burns about $80,000 of fuel on a one-way flight from Newark to Shanghai, he says.

No love for surcharges

Many fliers are unsympathetic.

"The fuel surcharges are the biggest joke," says Dave Christensen, who lives in Seward, Alaska, and works for a management consulting firm. "It's kind of like paying one discounted price for an all-you-can-eat buffet but, before you can get in line, you also have to buy a plate, knife, fork and spoon at an extra, inflated cost."

The surcharges and high fares, as well as a weak U.S. dollar against many countries' currencies, has caused a drop in U.S. originating passengers for some airlines.

Sales of Air France tickets declined more than 10 percent in the USA from April through August, says spokeswoman Karen Gillo. But travel to the USA has remained strong because of the strong euro and other factors, she says.

Many American business travelers say they're flying less. Christensen says this year will be the first year since 2001 that he won't fly more than 100,000 miles. He has made just three international trips this year -- six fewer than last year -- because of high fares.

It's not the high airfares but rather airlines' fees to make changes to tickets that most disturb business traveler Frank Luppino, who has made six international trips this year. United Airlines, for example, charges $250 for changes in tickets to most international destinations.

"The change fees associated with international travel are making it more difficult for me to change plans and make meetings abroad," says Luppino, the sales director of a Chicago firm that manufactures lighting and sound equipment for the entertainment industry.

Though many fliers moan about international airline fees and fares, consultant Boyd offers some comfort.

"International tickets, like all airline tickets, are an exceptionally good value," he says. "Their cost has not inflated materially over the past 30 years."