Higher airfares, more fees for amenities likely in 2013

Year should bring more amenities, some new planes, but fliers will pay

Chicago TribuneJanuary 3, 2013 

BIZ AIRLINES-OUTLOOK-BIZPLUS 2 TB

Dhiraj Parwann, center, of Chicago, listens to an American Airlines agent at O'Hare International Airport, December 21, 2012. (Alex Garcia/Chicago Tribune/MCT)

ALEX GARCIA — MCT

Airfares will be on the rise in 2013, and those niggling airline fees will metamorphose into optional bundles of services.

Meanwhile, onboard amenities, such as Internet access, entertainment options and refreshed interiors, will abound among U.S. carriers, but tight seating in coach probably won’t improve.

And 2013 might be the year you’ll finally be able to keep your smartphone, iPad or Kindle turned on during takeoffs and landings.

Those are some of the predictions airline industry experts foresee. Here’s the lowdown.

Higher fares forecast

Airlines pushed through six fare increases in 2012. Expect a similar number this year, said Rick Seaney, co-founder of FareCompare.com.

“I wouldn’t be surprised to see airfares rise like they did this year, between 3 and 6 percent domestically,” Seaney said. That’s because airlines will succeed in properly balancing supply and demand by trimming the number of seats they offer to match “decent, but bordering on tepid, demand.”

Fares are typically driven by four main factors: competition, most of all, then supply, demand and oil prices. “If you look at those drivers, they are, for the most part, on the airlines’ side, which gives them pricing power,” Seaney said.

That doesn’t mean there won’t be good airfare deals on some flights on some routes. And consumers will still see lower prices during off-peak days, such as Tuesday, Wednesday and Saturday departures and off-peak seasons, such as late January and early February. Like this year, summertime fares probably will stay relatively high, he said.

Fees get a makeover

The most noticeable trend in recent years with airline fees is that there are more of them: fees for checked bags, aisle seats, onboard meals, among many others. “What we hear is that people pay their fare and get to the airport and feel they’re constantly being nickeled-and-dimed to death for things that used to be included,” said Kate Hanni, founder of FlyersRights.org.

The top five U.S. carriers alone generated more than $12 billion in fees in 2011, with even more expected through 2012, according to the PwC report.

What consumers call fees, airlines call “unbundling” – making a la carte choices from services that used to be included in the fare.

A likely trend for 2013 might be called “rebundling,” airlines packaging a few now-optional services and charging for a tier of service.

“The airline industry is in a period of transition regarding the pricing of its products,” said Jay Sorensen, president of IdeaWorks, an airline consultant. “Airlines will offer fare products, such as basic, basic-plus and comfort, and allow consumers to purchase their desired level of comfort.”

Gadgets cleared for takeoff?

The Federal Aviation Administration will be reviewing its policy that forces passengers to turn off their portable electronic devices, such as smartphones, laptops, tablet computers and e-readers, during takeoffs and landings – technically, below 10,000 feet. Pressure in Washington is mounting.

In December, both the Federal Communications Commission and Sen. Claire McCaskill, D-Mo., urged the FAA to finally allow electronic devices during takeoffs and landings. McCaskill, a member of the Senate committee with jurisdiction over communications and aviation policy, points out the “absurdity” of the ban, especially given the FAA allows pilots to use iPads to replace their paper flight manuals in the cockpit.

“The current rules are inconvenient to travelers, don’t make sense and lack a scientific basis,” McCaskill said in a statement, adding that she is “prepared to pursue legislative solutions should progress be made too slowly.”

Cruising in comfort

Inside the aircraft cabin, passengers during 2013 will continue to see significant changes. Many airlines will be taking delivery of new planes, while others are upgrading interiors.

And while Wi-Fi has been available on many domestic flights for a while, the difference in 2013 will be seeing more airlines offering connectivity on trans-Atlantic flights, which require Internet access via satellites rather than ground towers.

“That’s actually quite important,” Kirby said, because passengers are disconnected for so many hours on long-haul flights.

Another trend is not so welcomed. Some airlines, in an effort to maintain profits, are stuffing more seats onto planes, offering less legroom and elbow room in economy class – even on longer, international flights.

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