Air travel in New York area becomes more costly

A jet lifts off from a runway at

A jet lifts off from a runway at LaGuardia Airport on Thursday, Feb. 27, 2014. (Credit: Craig Ruttle)

Air travel from the New York metropolitan area is getting more expensive, as airlines consolidate and fees charged to passengers multiply.

The average one-way domestic fare of those to the 25 most popular destinations out of Kennedy, LaGuardia and Newark airports rose 3.4 percent to $214.48 in the first nine months of last year -- the latest period for which data is available -- compared to the 2012 average, according to the Boyd Group International of Evergreen, Colo., an aviation consulting company.

Long Island MacArthur Airport in Ronkonkoma, which has had declining traffic in recent years as Southwest Airlines has de-emphasized the location, was an exception last year; the average fare there dropped 2.4 percent in the first nine months from 2012. Airport Commissioner Robert Schaefer attributed the decline to more discounts offered by Southwest and the arrival within the past year of two new low-price carriers, Allegiant Air and PenAir.

It did cost, however, an average of $1.13 more to get to Orlando, the most popular destination from the Islip Town-owned airport.

And those data don't include taxes or, significantly, fees, which differ for fliers. Michael Boyd, president of the Boyd Group, estimated that, nationally, average fees per passenger are about $30 per flight -- up 20 percent in four years. "I think we're going to continue to see fares edge upward," Boyd said, "but, more importantly, we are going to see revenue per passenger edge up at an even higher rate simply because fees are going to up."

Rising airfares have mostly negative effects on the region's economy, said John Rizzo, chief economist at the Long Island Association, the region's largest business group. "To the extent it's for business travel, the cost of doing business goes up, and that has a depressing effect," he said.

One potential positive: healthier airlines, hiring more workers and paying them more, Rizzo said.

Metro area airfare increases have actually slowed in the last two years. The average fare at Kennedy, LaGuardia and Newark rose by 27 percent from 2009 through the first nine months of last year, Boyd said, as demand for air travel rose with the end of the recession, and fuel costs and other expenses rose.

And at MacArthur, Boyd said, the average one-way fare of those to the 25 most popular destinations (direct or with connections) rose 12.7 percent from 2009 through the first nine months of 2013, to $148.79. Nationally, the average domestic one-way fare rose by 2.5 percent in the first nine months of last year from 2012, to $226.15, Boyd said.

 

Airlines keep adding feesFees are a growing part of the cost of flying. Airlines have instituted dozens of new fees for services once taken for granted by passengers, like checking bags, having an in-flight meal, changing a booking or watching a movie.

"Fees have become a huge source of revenues for the airlines," said Bill McGee, a travel consultant for Consumers Union, publisher of Consumer Reports magazine. He says U.S. airlines collected about $14.3 billion in fees last year alone.

And airlines also are effectively increasing fliers' costs by reducing the numbers of seats available at deep discounts, experts say.

For the higher fares and fees, McGee said, passengers are being stuffed into planes more crowded, on average, than at almost any time in the history of commercial aviation. In November, the last month for which figures are available, planes on U.S. domestic flights flew an average of 82 percent full, up from 79 percent a year earlier, said the U.S. Department of Transportation. In the 1980s and early '90s, said McGee, the figures were in the 50 percent to 60 percent range.

Projections from the Federal Aviation Administration don't offer any prospect of relief. It forecasts passenger traffic growth at an average annual rate of 2.9 percent through 2033, with domestic capacity growing at 2.1 percent a year.

 

Mergers blamedSome critics of the industry place at least some of the blame for higher fares and fees and more crowded planes on reduced competition resulting from decades of mergers in the industry. Since 2000, for example, American acquired TWA, America West acquired US Airways -- keeping the US Airways name -- Delta acquired Northwest, United acquired Continental, and Southwest acquired AirTran.

Last year, the Americanus Airways merger created the nation's largest passenger airline in number of employees, seat capacity and operating revenues. With that merger, four airlines control 85 percent of U.S. domestic air service, said Paul Hudson, president of FlyersRights.org, a Florida-based 30,000-member consumer-rights group for airline passengers.

In approving the Americanus Airways merger, the U.S. Justice Department set conditions that it says will help avert reduced competition. That included forcing both carriers to give up "slots" -- landing and departure rights -- at Reagan National Airport, to be allocated to low-cost carriers.

Unfortunately for MacArthur Airport, US Airways plans to comply with that condition by, among other measures, dropping its two daily flights from the Islip Town airport to Reagan, probably at the end of this year.

Hudson contends that it's time to revisit the 35-year-old Airline Deregulation Act of 1978, which opened the field for new airlines and gave old and new carriers unprecedented rights to enter and leave routes and raise and lower fares without federal government approval. It was intended to make air travel more affordable.

"Gotcha fees for everything, overcrowding, shrinking seats and legroom, reduced competition due to mergers, coupled with aviation security abuses, have accelerated the downward spiral of the air travel experience," Hudson said in a statement in October.

 

New laws soughtHe isn't seeking a return to the regulation of fares or routes or to bar new carriers from the industry, but he wants new federal consumer protection laws, including a cap on fees based on the actual cost of the service being provided. He wants restrictions lifted on foreign airlines flying domestic routes in this country, to increase competition. And he wants rules mandating minimum seat sizes and legroom.

"You do need to have some basic rules -- minimum requirements for minimum levels of service and reliability -- and you have to encourage competition, not reduce it to virtually nothing," said Hudson.

But adding more regulations, said Henry Harteveldt, an analyst based in San Francisco for the travel industry consulting firm Hudson Crossing, could discourage expansion by carriers offering the lowest prices in return for bare-bones service. "The concern I have about government regulation is that it could end up costing consumers money," he said.

Industry statistics derived from government figures that include two fees -- for changed reservations and checked bags -- show that flying has indeed gotten cheaper since 1978, the year airline deregulation began, when inflation is factored in. Adjusted for inflation and expressed in prices as of the year 2000, the average round-trip domestic fare fell from $442.88 in 1979 to $283.97 in 2012, said Airlines for America, a Washington-based trade group for the airlines.

Consumers Union's McGee said it's wrong to credit deregulation with all of the decrease; fares were coming down even before 1978, he said, as airlines bought more fuel-efficient planes, reduced cockpit crews from three to two and made other cost-cutting moves.

For their part, the airlines say they need the extra money. While the industry is profitable as a whole, it says it still is struggling to recover financially from the effects of the 9/11 attacks and two recessions since 2000. Airlines for America says U.S. passenger airlines lost a collective $63 billion from 2000 to 2010.

Chuck Thackston, a managing director for the Airlines Reporting Corp., an Arlington, Va., company that processes ticket transactions for airlines and travel agencies, thinks concerns about reduced competition are unwarranted. "It's going to continue to be a very competitive market in the U.S.," he said.

But he expects flying to continue to get more expensive. "We don't expect a big shift in the trends we have seen because airlines are still holding capacity fairly steady."

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