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Show Sat/Sun/Mon/Tues, April 26-29, 2014 Airfares are rising slowly Ticket prices up just $1 last year Associated Press The average price of an airline ticket for travel within the U.S. rose by just $1 last year, although prices are still modestly higher than they were five years ago. The U.S. Department of Transportation said Tuesday that the average domestic airfare rose to $381 in the fourth quarter of 2013, a 0.3 percent increase from a year earlier. The government said that the highest average fares were in Huntsville, Ala., at $528, and the lowest were $249 in Long Beach, Calif. The figures, which are adjusted for inflation, mostly count roundtrip fares, but about one-fourth are one-way trips if that's what the passenger bought. Taxes are included, but fees for checking bags, boarding early or getting an economy-cabin seat with more legroom are not. In the 12 months that ended last Sept. 30, the latest figures available, more than a dozen of the largest U.S. airlines raised more than $6.1 billion from fees on checked bags and reservation changes, according to government figures. That's made airlines less dependent on raising ticket prices to boost profits. Airlines got 71.5 percent of their revenue from fares in 2013, down from 87.6 percent in 1990. "The base fare may not be much higher, but because of the add-ons, it feels worse," said Rick Seaney, CEO of travel site FareCompare.com. Seaney added that airlines are also pushing up fares for nonstop trips -- in some cases charging 30 percent to 50 percent more for the convenience of avoiding connecting flights. The airlines are able to do all this because they are successfully limiting the supply of seats. After four major mergers since 2008, the four biggest airlines now control more than 80 percent of the U.S. air-travel market. Most planes are likely to be full this summer during peak vacation season. That means when flights are canceled because of thunderstorms at big, hub airports in Dallas, Chicago and elsewhere, it could be days before stranded passengers find a seat on another flight. The airlines have long argued that airfares have risen more slowly than many other things consumers buy, from a gallon of milk to the cost of college tuition. Airfares are up 10.2 percent from 2009, when the U.S. was digging out from the worst of the Great Recession. But they are down 16.3 percent since 2000 -the peak year for airfares -- while overall consumer prices have risen 33.9 percent, the government said. "It's a great time to fly," said Jean Medina, spokeswoman for Airlines for America, an industry trade group. "Air travel is one of the best consumer bargains in America, given its superior speed and price versus other modes of travel." It's also a great time for the airlines. Delta Air Lines Inc., American Airlines Group Inc. and Southwest Airlines Co. are expected to report this week that they earned a combined profit of more than $700 million in the first three months of 2014. That's usually the slowest time of year for travel, and it was considered remarkable when those airlines earned $200 million in the first quarter of last year. Among the big four, only United Airlines parent United Continental Holdings Inc. is expected to report another large loss. George Hobica, founder of the travel-shopping site airfarewatchdog.com, sees a connection between glowing financial reports and the slower pace of airfare increases. "The airlines are profitable, and they've reached the limits of what consumers can afford, so they've dialed back on fare increases," he said. percent on the average flight, up from 81.2 percent a year ago. The average fare per mile rose 1 percent. Including Delta Connection regional flights, the company spent $2.70 billion on fuel, its largest expense in the quarter. Still, that was a savings of $109 million, or 4 percent, as Delta paid $3.03 per gallon instead of last year's $3.24. The company expects total fuel costs of $2.97 to $3.02 per gallon in the second quarter. The break on fuel spending more than offset an increase of $58 million, or 3 percent, in labor costs, the company's second-biggest expense at $1.97 billion. As long as travel demand holds up, Delta should be able to cover those costs. The company overcame severe winter weather and the shift of Easter travel into April. The airline's president, Ed Bastian, said Delta saw gains from corporate travel accounts and passenger fees -- and predicted that money from fees will rise. In the 12 months that ended last Sept. 30, Delta took in $1.66 billion just in fees for checked bags and changing reservations -- the most of any airline and 22 percent more than runner-up United -- according to government figures. Bastian said that "merchandising" -- that's other fees such as charging extra for priority boarding, economy seats with more legroom, and upselling to firstclass -- grew 20 percent in a year to $165 million. "We think we can grow this high-margin revenue stream by $500 million annually over the next three years," he said on a call with analysts. Helane Becker, an analyst with Cowen and Co., said Delta was aggressively controlling costs other than fuel and said the company's outlook for the second quarter was stronger than expected. Standard & Poor's analyst Jim Corridore said Delta was driving the entire industry to focus more on return for shareholders. The financial strength of U.S. airlines has increased as mergers have reduced competition and made it easier for the carriers to control the supply of seats. Later this week, American Airlines and Southwest Airlines are expected to report that their first-quarter profits also rose sharply from last year. Among the largest four U.S. airline companies, only United Continental Holdings Inc. is expected to report a loss. Delta tops profit forecast Associated Press Delta Air Lines Inc. is making more money by filling more seats on its planes and paying a bit less for fuel. Delta's first-quarter profit beat expectations and underscored how most big airlines are prospering with a combination of strong business travel, slightly higher fares and money from extra fees. Even bad weather couldn't stop Delta from boosting profit, although it canceled more than 17,000 flights in January and February -- double the number from a year ago -- which cost the company $90 million in revenue and $55 million in pretax income. The Atlanta-based airline said Wednesday that it expects solid demand throughout the year, and it predicted that a key statistic of revenue per mile will grow in the mid-single digits during the Aprilthrough-June second quarter. Delta shares jumped $1.72, or 4.9 percent, to $36.67 in midday trading after hitting an all-time high of $37.41 earlier in the session. They began the day up 27 percent in 2014. Delta said that net income in the first quarter was $213 million, or 25 cents per share, up from $7 million, or a penny per share, a year earlier. Excluding items such as fleetrestructuring costs and fuel-hedging, Delta earned 33 cents per share. Analysts, who usually exclude one-time costs and benefits like that, were expecting 29 cents per share, according to FactSet. Revenue rose 5 percent to $8.92 billion, matching analysts' forecasts. Passengers flew 4 percent more miles than in early 2013, which helped boost occupancy to 82.7 A-7 The Park Record RossPCRE.com | RossParkCityRealEstate.com E X PE R I E NC E - K NOW L E D G E - C O M M I T M E N T BuyERs aND sELLERs asK hOW WE CaN hELP yOu! Associate Broker Ka R I N & T I M R O s s EXPERIENCE - KNOWLEDGE - COMMITMENT karin 435.901.4663 k t r o s s @ pru-utah.com tim 435.901.3753 t r o s s @ pru-utah.com KATHIE MANANGAN REALTOR® 435.647.7143 LuxuryRealEstateParkCity.com Lives The Park City Lifestyle GET Jacked up 1 $ 10 1 $ 10 ©2014 Del Taco LLC DTL-9375 PRICE AND PARTICIPATION MAY VARY. Mountain High Dental DTL-9375_P4_Park_Record_Ad_R1_F.indd 1 4/22/14 2:44 PM Offer Extended through April due to Popular Demand. 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