Plane capacity, new fees sending summer airfares sky-high

For the procrastinators still hoping to score a great deal on summer airfares, things aren't looking good.

The average ticket price between Memorial Day and Labor Day from the Minneapolis-St. Paul International Airport is $518. And nationwide, fares jumped almost 5 percent from May 2013 to May 2014, the biggest increase in three years, according to the Bureau of Labor Statistics.

Blame it on supply and demand. For years, cash-strapped airlines have cut capacity to save money, so there are fewer seats available for fliers to buy than ever before. Pair that with the summer stretch of good weather and fares rise to even loftier heights.

"Planes are very full now," said Chris McGinnis, editor of TravelSkills.com. "Load factors are at record levels. There are fewer planes flying now than before 9/11."

Airlines continued to pull back on capacity during the recession and have been reluctant to add more planes after becoming more profitable without them. A string of mergers and acquisitions among the major carriers have also pushed up prices, said Christopher Elliott, ombudsman at National Geographic Traveler magazine.

"It's a cat-and-mouse game between fliers and airlines," he said. "There is higher demand, so fares go up, but if prices go too high, travelers don't book and then there's a sale."

It gets even costlier in the Twin Cities, where experts say a lack of competition has kept ticket prices historically higher than other markets. The Minneapolis-St. Paul International Airport is more expensive than 22 of the 30 major airports, and that's despite discount carriers such as Spirit Airlines joining the fray in recent years.

"If we have to pay $1,000 or more for two tickets, we won't go," he said. "I'm a teacher. We'll look for something cheaper and closer to home."

But travel experts say consumers shouldn't just scrap their travel plans, as deals can still be found. "It depends on where you're going," said George Hobica, founder of Airfarewatchdog.com. "Yes, domestic tickets are up about 5 percent, but you can still get a round-trip ticket to from MSP to Atlanta on Southwest for $158, round trip to Boston on Sun Country for $318 and $198 to Dallas on Spirit," he said.

Spirit Airlines, in particular, has changed the game in the Twin Cities, offering several new routes to popular destinations for prices that have been significantly less than the other major carriers. After adding service to Baltimore and Houston, the Florida-based no-frills carrier announced that it would offer seasonal nonstop service between the Twin Cities and Detroit effective May 22 and operating daily until Nov. 1.

Liz Johnson of Carbondale, Colo., flew from Denver on Frontier to vacation in the Twin Cities this week. She has found fares about $30 higher this summer compared with last year. She paid about $200 each for her round-trip tickets. But it's the new or higher incidental fees on luggage, leg room and other peripheral amenities that she said passengers need to consider as part of the total cost of flying. Spirit, especially, is known for the fees it charges customers.

"The ticket prices are a little higher, but the other fees are a lot higher," she said. Travelers are discovering that airfare alone is becoming a less significant part of the total. To keep her travel expenses low, she goes online six months out and compares the fares departing and arriving plus or minus three days as she looks at fares online. She also checks nearby airports in Aspen, Grand Junction and Vail/Eagle. Unfortunately, Twin Cities travelers don't have the advantage of a competing airport nearby to drive down prices.

"Most of the people I talk to who wait until the last minute to book wish they hadn't," he said. "I just dealt with someone who tried to book a sale fare on Delta 10 minutes after she got the e-mail announcing the sale. The cheaper fares were already gone."

In cases where consumers like McElhiney aren't finding their target price, many are choosing not to fly. A study by Tours.com shows that most consumers are persuaded to chose leisure travel by air based on price alone. The new normal is that most people aren't setting aside lots of money for a vacation, Elliott said.

"If they have to drive instead of fly, they figure they can spend more on better accommodations or excursions."