Airfares fueled by more than oil prices

Last year, as the price of a barrel of oil began its march from $70 to $100, Northwest Airlines and other major carriers responded by trying to boost ticket prices with a series of fuel surcharges.

Not every attempted increase "stuck," but by one measure, major-airline fuel surcharges have reached $40 per round-trip ticket, up from $10 last fall.

But that doesn't mean 2007 ticket prices went up for every air traveler departing from the Twin Cities.

If you fly regularly to Detroit, you probably paid more by the end of 2007 than at the beginning. But if you traveled to Los Angeles or Seattle, you may or may not have paid more, depending on when you boarded the airplane.

A Star Tribune analysis of 2007 fares on Northwest's top five routes from Minneapolis found a consistent pattern of price increases on only one other route besides Detroit. On flights to New York's LaGuardia Airport, prices rose sharply through the middle of the year, before dropping in the October-through-December period -- even though jet fuel prices didn't decline at the end of the year.

Those findings don't suggest that the same pattern has held on the hundreds of cities Northwest flies to and from out of its Twin Cities hub. And many travel analysts predict the continuing increase in fuel costs will translate into higher fares for all travelers in 2008. This year alone, Northwest and other major carriers have tried to push through six fuel surcharges. By one count, three have stuck.

If anything, the wide price fluctuations on those five routes reveals the dynamic and complex nature of airline fares, which can be influenced by competition and seasonal travel patterns as much as the cost of fuel.

Northwest, which has hubs in both Detroit and the Twin Cities, dominates the Motor City route, so it has pricing power. But it faces more competition flying to Los Angeles and Seattle, so it's less likely to burden those customers with higher fares -- unless its competitors do the same.

"Usually the only reason Northwest Airlines lowers prices is if it is forced to, competitively, at least when it flies out of the Twin Cities market," said Peggy Van Sickle, director of business development for Corporate Travel Solutions, a St. Paul firm that provides travel services for companies, corporate meetings and leisure travel.

Consumers who flew round-trip to Detroit on the first Monday evening of every month in 2007 saw average ticket prices increase from $280 on Jan. 1 -- a holiday -- to $610 on Dec. 3, said Robert Metcalf, whose Minneapolis-based airline price website, FlySpy.com, provided the Star Tribune with Northwest fare prices for 2007.

Passengers who flew round-trip to Los Angeles at the same time on the same days saw prices go from $446 on Jan. 1 to $198 on Dec. 3 -- and on other Mondays in between, fares ranged from $188 to $359, he said. All prices represent a 14-day advance purchase and a trip with a three-night stay.

One reason for the inequality in who pays Northwest's fuel surcharges is that business travelers are likely to be charged more than leisure passengers, said Rick Seaney, CEO of Dallas-based airline flight website FareCompare.com.

"People don't go to Detroit on leisure travel, they're going for business," Seaney said. "Los Angeles travel is more for leisure, and price increases don't stick as well with leisure travelers."

While jet fuel is the biggest culprit in fare increases, many airlines also have tried to economize by reducing the number of domestic flights so that each will be loaded closer to capacity, Metcalf said.

In addition, Northwest and other airlines have been able to increase fares several times in the past year, including the surcharges, because business and consumer demand has remained strong, Seaney said.

It's unclear whether Northwest customers will continue to see such varied fares, in which some people appear to pay more jet fuel surcharges than others. In late January, Northwest and other major U.S. airlines raised the fuel surcharge on most routes from $20 to $40 per roundtrip ticket. Efforts by some airlines to raise the surcharge to $50 failed. By comparison, fuel surcharges last year were $10 to $20 per roundtrip flight.

By one measure, the airlines are charging more. They report that their "yield," one measure of revenue per passenger, was 12.94 cents per domestic revenue passenger mile in 2007, compared with 12.78 in 2006, according to the Air Transport Association. In January of 2008, industrywide yield rose 7 percent on domestic flights.

Steve Alexander • 612-673-4553