I’ve been perusing the transportation analysts’ reports on several airlines’ 4th quarter financial results as well as reviewing some of the future looking guidance from airlines to investors — and it is pretty simple: demand is still firm — even in the wake of a “possible” economic downturn and record fuel prices. Several airlines note firm demand in the U.S. domestic markets, and legacy airlines are also pleased about the demand for seats on transatlantic and Latin American flights… Liked this? Then check out “Good News, Bad News”

Another thing: many of these analyst reports note that airlines are willing to continue to reduce/restrain domestic U.S. capacity. You know what that means:

Limited Supply + Firm Demand = Potential for Higher Prices

Something else to add to the mix: Wall St. continues to be very supportive of all the merger talk (much of it focused on United). And that means less choice and fewer options for fliers. Look for another fuel surcharge increase — most likely today.

On the bright side — yes there is a bright side — it doesn’t mean you can’tfind any cheap airfare sales, or make a good air travel buying decision — it just means that those that educate themselves and use technology have an even better chance of getting the best deal. We will continue to work on our technology at FareCompare.com and provide you the educational materials you need to make the always make best air travel purchasing decision