Are Nightmare Airfare Hikes Coming?

Sept. 1, 2010 — -- 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 veryworried about the economy and the lingering possibility of a double dip recession. This prospectalone should keep ticket prices in check -- especially for leisure travelers who are watching theirwallets like a hawk.

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

International travel is another matter; we're seeing fares 30 percent higher than last year. It looks a lot more like 2005 than 2009, and I expect those prices will stay firm.

If you want to travel the USA, fall is the time, but watch out for the holidays. Fares around Thanksgiving and Christmas will be high; there's a lot of pent-up demand because so many of us skipped family trips last year, so the airlines are expecting full planes and they will be making the most of it.

Thanksgiving and Christmas Airfare Deals

About all you can hope for this holiday season is getting what I call the best of a bad deal.

How to do that? Easy. Don't procrastinate. As I said, the planes will be full, and you may not get a seat at all if you wait too long. And, don't check a bag: there is no easier way to save on airfare than to use a carry-on, especially when the whole family is traveling.

One other thing: the airlines have already got their "peak travel day" surcharges in place for the holidays so use an airline surcharge chart to see which days to avoid, or at least which days have the cheapest surcharges.

This year, it could be easy to get an "airfare nightmare" but if you follow these tips, there's no reason to lose any sleep over your plane tickets. Pleasant dreams.

This work is the opinion of the columnist and does not reflect the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations that include ABC News, The New York Times, the Wall Street Journal, Reuters, the Associated Press and Bloomberg. His website, FareCompare.com, offers consumers free, new-generation software, combined with expert insider tips to find the best airline ticket deals.