Boston's airfares rising sharply

Fuel costs, short flights help Logan prices top US average

It's getting more expensive to fly all over the country, thanks to rising fuel costs, but because of other factors as well, the cost of flying into and out of Boston is soaring higher than almost anywhere else. So far this year, domestic airfares at Logan International Airport have risen twice as fast as the national average.

Fares from Boston to its 58 most popular domestic destinations rose 27.5 percent this year over 2007, compared with a national average increase of 13.8 percent, according to data analyzed for the Globe by Farecast Live Search, an airfare tracking website formerly called Farecast.com. The increase reflects the average lowest fares listed daily between Jan. 1 and July 8 for travel within the next 90 days. Of the country's 39 largest airports, only four - New York's LaGuardia, Newark Liberty International, Ronald Reagan Washington National and Port Columbus airports - had bigger increases than Logan.

Airlines around the world are raising fares because of record-high fuel prices. But the ticket increases have jumped higher in Boston because of the large number of short flights, where the spikes have been highest on a percent-change basis. Boston has also been hurt by the lack of strong competition from discount carriers such as Southwest Airlines and Virgin America, which keep a lid on fares.

"The ones that are up the most look to be short-haul markets, like Boston to Pittsburgh, Boston to Philadelphia, Boston to Columbus," said John Rauser, a Farecast data-mining engineer. Almost half of the flights to Boston's most popular destinations are within a 1,000-mile radius, he said. Because these short-haul flights charge relatively inexpensive fares, price increases look larger. "A small dollar increase - but a relatively larger percentage increase - is palatable to consumers, and so it is more likely to stick."

While low-cost carriers JetBlue Airways Corp. and AirTran Airways fly one out of five Boston passengers, more service from these kinds of airlines is needed to anchor Logan's airfares. "If Southwest flew to Logan, you'd be in the bottom part of the pack for fare increases," said Rick Seaney, chief executive of Farecompare.com, a consumer airline ticket research website. "If you didn't have JetBlue flying coast to coast, it would be a lot higher."

Airlines say a particular route's fare partially reflects the cost of operating at the departing and arriving airports. But Matthew Brelis, a spokesman for the Massachusetts Port Authority, which runs Logan, said: "Airfares are set by the airlines."

Of the Hub routes Farecast examined, prices rose the most over the past year between Boston and Columbus - a pair of cities JetBlue stopped flying to in January. Now the cheapest Columbus roundtrip flight on average costs twice as much as it did - on average $132 more - a year ago. The second-highest increase was between Boston and Philadelphia: The average lowest roundtrip airfare shot up 98 percent - on average $132 more, according to Farecast.

John Kwoka, a Northeastern University economics professor who had been flying that route seven times a year, noticed the fares offered by Delta Air Lines and US Airways spiked once AirTran Airways pulled out of the Boston-to-Philadelphia route in November.

Kwoka pulled out, too.

"I fly less and I do what a lot of people do, which is drive to Providence" to catch a cheap Southwest or US Airways flight to Philly, said the 62-year-old. "However hard that is, you can save many hundreds of dollars by leaving from somewhere other than Logan."

Farecast's analysis shows airfares to Logan's most popular destination - New York - rose 27 percent to 50 percent over the past year, depending on whether the flights landed at LaGuardia, John F. Kennedy International or Newark. Fares on another frequent business-trip route - Boston to Washington, D.C. - surged 33 percent.

Steve Zakszewski of Somerville, who considers himself "a very conscientious shopper," will even ride a bus four hours to circumvent Boston's rising airfares. Instead of flying out of Logan, the 43-year-old circus lighting designer said, "if time's not a factor and it would save $200 to fly out of JFK, I could take the Fung Wah [bus] to New York, take the New York metro to JFK, and save myself 150 bucks."

Of course, airfares at other airports have been rising as well. US airlines - rocked so hard by rocketing fuel prices that some may be on the brink of bankruptcy soon - have tried with mixed success to inch airfares up by $4 to $70 roundtrip a collective total of 21 times during the first half of this year. That's almost as many attempts as in all of 2007, although last year most of the 23 increases popped up after Labor Day, said Seaney. If airlines keep up their fare frenzy, they will have tried to raise their rates about 40 times by this New Year's Eve.

"The pace is torrid," said Seaney, an airfare researcher. "They keep firing one off every 10 days or so."

Carriers say they have little choice. American Airlines Inc.'s parent company, AMR Corp., Delta Air Lines Inc., and Continental Airlines Inc. each reported quarterly losses last week, faring worse than the same period last year because of the higher fuel costs.

"We're not the least bit apologetic about raising fares," said American spokesman Ned Raynolds. "The public and media perception is that all the increases stick and fares have gone up dramatically. The reality is that today's average fares are lower than they were in 2000."

Back then, American's average domestic roundtrip airfare was $326, he said. Now it is $298, or 9.4 percent less.

Historically, airfares have dipped for travel between Labor Day and mid-November, with sales beginning in mid-August. But specialists aren't sure airlines will trim prices this year, especially since they will be slashing seat capacity an estimated 11.2 percent in the fourth quarter compared with the year-ago period to hold down the supply of available seats and shore up prices.

As a result, buying plane tickets has become a bigger gamble. Will the price rise or fall in the next few days?

"It's kind of like playing the stock market," said Anne Banas, executive editor of SmarterTravel.com. "You want to watch it and buy at the right time."

Source: boston.com