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Personal Finance > Smart Spending > Travel
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Flying in 2003: What to expect
Passengers can look forward to cut-backs, higher prices, and less service.
December 6, 2002: 5:57 PM EST
By Sarah Max, CNN/Money Staff Writer

BEND, Ore. (CNN/Money) - Planning on flying somewhere next year? Brace yourself. Air travel is likely to be more expensive, more time consuming and more frustrating in the coming year.

Airlines, and not just United, are looking for every opportunity to cut costs. They are handing out pink slips, trimming their flight schedules, canceling unprofitable routes and trying harder than ever to fill every last seat on their planes.

"In the next 18 months we are likely to see more change than in the last 10 years combined," said Kevin Mitchell, chairman of the Business Travel Coalition. And that doesn't take into account a possible war with Iraq. "If we go to war with Iraq, it will spike fuel prices, scare the living daylights out of the traveling public... and be the kiss of death for airlines."

Fewer seats

War or not, ticket buyers will have a harder time finding available seats on airplanes. In hard times, airlines reduce the frequency of flights and eliminate some routes altogether. U.S. airline capacity for the first 10 months of 2002 is already down approximately 8 percent from the same time in 2000, according to the Air Transport Association of America (ATA), and is expected to shrink further in 2003.

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In November, United said it would cut capacity by 6 percent in 2003, and the carrier is expected to cut even more as it teeters on the brink of bankruptcy. American Airlines, the nation's largest carrier, is also downsizing. The company says that in March 2003 its capacity will be down 18.6 percent from the same period in 2001. And when these industry behemoths move, you can expect the rest of the industry to follow.

Longer travel times

Tighter security measures have already made the notion of "hopping on a plane" a thing of the past. And in 2003 the federal government will be enforcing a new rule that requires passengers to have an actual boarding pass to get to their gates; a copy of the itinerary won't do. You'll have to print your boarding pass from the airline's Web site or get it from a kiosk outside the gate. If you can't do either, you'll be standing in line with all those people checking bags.

But security won't be the only thing slowing you down. Fewer planes in the air will mean longer layovers and more connections.

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David LeMay, partner at Chadbourne & Parke, talks about how airline bankruptcy works and comments on United's future.

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If an airline is now flying between two cities every hour, expect to see those "frequencies" cut back to every two or three hours. Business travelers, says Mitchell, will be particularly affected by this change.

"That highly desirable 8 a.m. flight you used to get eight days in advance will be sold out," he said. "You'll need to wait until 11 a.m. and in some cases even stay overnight because of it."

International and non-stop cross-country flights are expected to be reduced, but small and midsized communities are likely to suffer the most when airlines trim their schedules. Not only are these communities among the first places airlines look to cut routes, they're the last place competitors want to take over.

Higher fares

To be fair, today's airline prices are a bargain. Pressure from bargain-hungry Internet shoppers as well as from a downbeat economy and terrorism fears have brought the average ticket price down a lot over the past couple of years. In September, the average price of a domestic ticket was $119 for a 1,000-mile trip and $409 for a 4,000-mile trip -- about 18 percent cheaper than in September 2000 -- according to the ATA.

Experts believe that if United Airlines declares bankruptcy, the immediate result may be even lower fares. According to the National Business Travel Association bankrupt carriers often reduce their fares or offer other incentives as a way to counteract the public's concerns about flying with them. When this happens competitors have to lower prices to compete.

But as airlines reduce frequencies and discontinue routes, prices could come back up. "We've already noticed that some of the lowest fares have increased as airlines have reduced capacity," said Kristi Jones, president of Virtuoso, a network of 280 travel agencies specializing in luxury travel. "Inexpensive fares have already doubled in some cases."

More restrictions and fees

Passengers should be prepared to encounter more fees and restrictions in the coming year, say travel experts.

Many airlines already charge passengers a $100 fee per ticket to change a reservation.

They have also tightened the rules for redeeming unused tickets. In the past, if you decided not to use your ticket you could, for a fee, put the value of that ticket toward any of the carrier's other flights. This year, just in time for Labor Day, the airlines introduced new "use it or lose it" rules. If you don't make a flight, you must rebook your ticket by the end of that day and, in most cases, fly the same exact route.

Less, and worse, customer service

Since Sept. 11, 2001, the airlines have collectively cut 80,000 employees, according to the ATA. Some 30,000 more job reductions are scheduled to take place between October 2002 and December 2003.

With fewer employees manning phone lines and check-in counters, customer service will surely suffer. And low morale won't help matters. "You're going to have thousands of customer service employees who are nervous, angry and wondering when the other shoe will drop," said Mitchell.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.