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U.S. airfares rise: 2005 shows consecutive quarterly hikes after years of declining prices.

Article Excerpt
Huge fuel costs, continued competition amid record load factors and cutbacks in capacity are driving major and low-cost carriers alike to raise U.S. fares.

Average domestic airfares beginning early last year have inched upward each quarter, and the market that is marked by more passengers and less seats puts increased pricing pressure on corporate travel buyers. Although travel managers may dread the prospect of continually climbing airfares--as is anticipated through 2006--averages to date still fall well below those charged earlier this decade.

"There is a ceiling on fares," said Air Transport Association chief economist John Heimlich. "I think right now we're trying to recalibrate pricing to see where those ceilings are and where that threshold is. We don't expect fares to come back to their peak and we don't think we're going to have the bubble we had in the late '90s."

In fact, 2005 as a whole brought a new six-year low in average annual domestic fares. Airfares last year averaged $216, trending downward since 2000, when the average hit $259, according to the quarterly American Express Business...

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