Rick Predicts: Airfare 2009 — The Good and Not So Good

December 10, 2008 | Posted in: Airfares, Airline Fees, Forecast, Fuel Watch

It’s that time of year again — for New Year’s Predictions — and I see a need to jump into the fray.

That’s because I just read an article that states, “not only will airline prices continue to drop in 2009, but travelers will get more bang for their buck” on U.S. airlines.

Sorry, but that’s a bit too rosy. Overall, I predict that domestic ticket prices will stay at or near post-9/11 highs, and actually exceed those highs if you factor in such things as the past year’s fees on everything from bags to better seats. However, the picture is brighter on the international side. Here’s my reasoning:

DOMESTIC AIRFARE: We had more than 30 attempted airfare hikes (most of them, successful) between the summers of 2007 and 2008. And since then, the airlines have shown unusual discipline in cutting capacity, cutting seats — in order to keep their planes full. The situation is stable, and therefore prices will remain high, with the exception of targeted airfare sales — like the current crop of holiday sales.

INTERNATIONAL AIRFARE: There was a rush to make more seats available on these higher-margin flights, but some of these seats are flying empty, which means they are being discounted. Add to the equation the fact that fuel price drops can more dramatically change the cost structure of international flights with their newer, more fuel efficient aircraft — and that adds up to good news for passengers. So does low cost Ryanair’s expected entry into transatlantic flights — they say they may fly across the Pond for as little as $20 — or less.

Clearly, this is a good news/not so good news scenario, in which the winners will be the people who know when and where to find the best deals available, every time.

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