Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Why is airfare rising? Because you keep paying

airport_departure_screen.gi.top.jpg By Aaron Smith, staff writer

NEW YORK (CNNMoney) -- The cost of a plane ticket keeps jumping, and it seems the sky's the limit for price. Why? Because you're willing to pay.

The major U.S. airlines have hiked fares six times so far this year, already doubling the total number of increases for 2010, according to Rick Seaney, chief executive of Farecompare.com.

But consumers have continued to pay the increased fares, so the airlines have become bolder in driving the prices up even further.

The average roundtrip airfare between major U.S. cities has crept up to $311, which is getting awfully close to the spring-summer peak of $318 in 2008. This is an important benchmark for how high consumers are willing to go, Seaney said, and sticker shock could soon set in.

"I don't expect prices to rise unchecked," he said.

But prices may have already overtaken 2008 levels. Seaney said that the average airfares of $318 in 2008 versus $311 today do not include ancillary fees for checked baggage, pet travel, non-alcoholic drinks, food and other services that were free in 2008. So many travelers are probably paying more to travel now than they were in 2008, or even 2001 -- the previous peak.

"I think airlines may be getting close to travelers' wallet breakpoint," said Seaney. "When or if that does happen, airlines will begin pulling the lever on seat cuts and fee hikes."

But for now, airlines have been hiking up fares, practically on a daily basis, said Tom Parsons, travel pricing guru at BestFares.com. They also hiked up fuel surcharges by more than 20% since 2008, even through oil prices are down about 28% since their 2008 peaks.

The airlines have also cut capacity, meaning they eliminated their least fuel-efficient flights. This has been a highly successful strategy for airlines, allowing them to fly fuller planes and provide fewer choices for consumers.

"I wouldn't touch an airline ticket right now," he said. "Don't blink. Let the airlines blink first." To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.88%3.83%
15 yr fixed2.84%2.96%
5/1 ARM3.24%3.09%
30 yr refi3.92%3.94%
15 yr refi2.94%3.05%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 16,472.37 200.36 1.23%
Nasdaq 4,707.78 80.69 1.74%
S&P 500 1,951.36 27.54 1.43%
Treasuries 1.99 -0.05 -2.60%
Data as of 3:40pm ET
Company Price Change % Change
Bank of America Corp... 15.38 -0.17 -1.09%
Apple Inc 110.38 0.80 0.73%
Micron Technology In... 15.91 1.14 7.72%
General Electric Co 25.47 0.28 1.11%
Microsoft Corp 45.57 0.96 2.15%
Data as of Oct 2


The NFL is the world's richest sports league and by far the most popular sport in the U.S. But it has struggled to attract overseas fans. More

After years of talks, negotiators for the United States and 11 other nations are trying to hash out final terms of a controversial free-trade agreement. The Trans-Pacific Partnership, or TPP, would make trade easier across many areas of business. More

Smarties, a Halloween candy staple, have been around for 66 years. Three Millennial women are revolutionizing it. More

Spending more than you make is bad for your finances, but other not-so-obvious money habits will hurt your long-term savings. More