Time to let fly with another year’s worth of predictions. Here’s what I foresee for 2013:
Hear air travel expert Rick Seaney and editor Anne McDermott add some meat to these bones:
1. Bundled-Fee Fever
Look for more airlines doing as American and Delta did last month – bundling multiple services and selling them for a little less than the fees you’d pay if you purchased them separately. Popular bundles include a free bag, early boarding and the like. Also look for new solo fees like Southwest’s no-show penalty, expected to take effect sometime in the first part of the year.
2. Merger Mania, Maybe
I’m looking at you, American Airlines – and US Airways. It’s no secret that they may be getting together although it certainly didn’t seem so when American started on its slog through bankruptcy a year ago. I put odds at close to 70% that the two will team up after American emerges from bankruptcy – and likely within the first half of the year. UPDATE Jan. 7: American’s CEO says we’ll learn if a merger is a ‘go’ in the next two weeks.
3. Airfare Hikes will Happen
We saw airlines successfully raise prices seven times last year – and if that pains you, check out our chart to see how many times they tried and failed. It would not surprise me to see another seven hikes this year and maybe more. Don’t look for decreases unless the price of a barrel of oil drops to the $70 to $75 range and it would have to stay in within those numbers for about four to six months in order for airlines to reap the benefits in lower jet fuel prices. UPDATE Jan. 7: United kicked off airfare hike season in the first week of the year, but its effort at raising ticket prices did not succeed.
Here’s another factor in rising airfares: airlines want to raise some ticket prices is because they’re already dirt cheap. Look at ticket prices to Europe this winter – about $750 to $800 round-trip (and in some cases, significantly less). About $450 of that cost is a fuel surcharge and another $150 or so is for government and airport taxes, so the cost of the airfare itself can be less than a hundred bucks each way.
4. Smaller City Cutbacks Continue
Unfortunately for those who live in smaller cities, we’ll see airlines continue to cutback routes as they consolidate by capacity cuts. It’s already been happening in the wake of Southwest’s acquisition of AirTran. You can expect more flyers driving further to bigger airports to get in on cheaper tickets – and the routes they want and need.
5. Happier Financial Headlines for Airlines
Look for more profitable quarters for airlines, something of a reversal from the dismal days of the 2000’s when several carriers disappeared for good.
6. Peak Passenger Experience
OK, maybe I’m overstating the case a bit with that peak business, but things will improve, mainly because so many airlines are welcoming brand new aircraft to their fleets. This means larger overhead bins for our carry-ons and in some cases, more comfortable seating. I also wouldn’t be surprised to see airlines emulating some of the carriers of Asia where flight attendants hand out tablets for passengers to use for movies or other entertainment options (but yes, they do make you turn them in again after landing).