Airline ticket prices

Welcome to the autumn fare hike

Sep 11th 2011, 21:01 by N.B. | WASHINGTON, D.C.

MOST of the travel news this week has been focused on the bomb threat against New York and Washington and the changes to air travel since the 9/11 attacks. But flying under the radar was yet another increase to airline ticket prices. On Friday, Southwest Airlines announced that it would join other domestic carriers in raising prices for premium tickets by around $6-$10 per round-trip.

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Slightly more expensive tickets are a pain for companies that buy a lot of them, but they're also a sign that demand remains high. That's a good sign for the airlines and for the economy overall. And it's not clear many travellers will even notice the difference. CNN interviewed Harlan Platt. a finance professor at Northeastern University, about the increases. Here's what he said:

These are not substantial and will probably be ignored by most consumers. It's very similar to the local grocery store raising the price on a can of soup from $2.29 to $2.39. Most consumers just won't even see it.

The important thing to remember is that air travel is still a pretty good deal. Inflation has significantly outpaced average airline ticket prices over the past decade, so most tickets are cheaper in real dollars than they were before the September 11th attacks. (The Tulsa World 's D.R. Stewart has a good column on this subject on Saturday.)

The real question going forward is how much more airlines can continue to raise prices. Will economic weakness make more price increases impossible? As Mr Stewart notes, the airline industry claims it has lost a collective $55 billion and shed 160,000 jobs in America alone since 2001. Making airfare cheaper is all well and good. But at some point, it's important to have strong, financially sound airlines, too. Will a decade of cost-cutting and consolidation ensure that happens? Stay tuned.