The continued slow recovery in GDP will result in consumer demand for domestic air travel outstripping marginal capacity growth, leading to a decrease in available discounted seats and making travel more costly for travelers, according to Mark Drusch, chief supplier relations officer at Fareportal, the parent company of CheapOair.com and OneTravel.com.
With bookings for the Thanksgiving holiday already up 22 percent from last year, many travelers can expect to pay higher airfares in the near future, said Drusch, with most airlines planning second half 2013 domestic capacity increases of a mere 1—2 percent.
Drusch, a 20-year industry veteran of Continental Airlines, Delta Air Lines and Lufthansa where his responsibilities included revenue management, also offered predictions for the next 12 months:
1. Travelers will pay higher domestic fares, mostly driven by fewer deeply discounted seats available, a result of marginal domestic capacity growth and increasing demand. This excludes travel to Hawaii which will see lower fares due to higher capacity from all players.
2. Significant growth, both domestically and internationally, from specialty low cost carriers like Spirit and JetBlue will continue.
3. Some international markets will see lower fares due to capacity additions and slower GDP growth in the region, specifically parts of Latin America and Asia.
4. Airlines will continue to evolve their products, offering more unique services, new ancillary products and product bundling.
5. International carriers will begin to follow U.S. carriers in the ancillary trends and start charging for formerly free services.
6. International joint ventures will increase and deepen across the travel industry.
“Consumers will have to become more competitive shoppers,” said Drusch. “They will take the time to find the best value and price to fit their individual needs.”
He noted Fareportal has partnered with airlines to launch programs like US Airways ChoiceSeats and American Airlines Choice Essential and Choice Plus on Cheapoair.com, giving customers more freedom to customize their travel.
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