Airfares will be on the rise in 2013, and those niggling airline fees will metamorphose into optional bundles of services.
Meanwhile, onboard amenities, such as Internet access, entertainment options and refreshed interiors, will abound among U.S. carriers, but tight seating in coach probably won’t improve.
And 2013 might be the year you’ll finally be able to keep your smartphone, iPad or Kindle turned on during takeoffs and landings.
Those are some of the predictions airline-industry experts foresee in the new year. Here’s the lowdown on fares, fees and flight experience for 2013.
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Higher fares forecast
Airlines pushed through six fare increases in 2012. Expect a similar number in the new year, said Rick Seaney, co-founder of FareCompare.com.
“I wouldn’t be surprised to see airfares rise like they did this year, between 3 and 6 percent domestically,” Seaney said. That’s because airlines will succeed in properly balancing supply and demand by trimming the number of seats they offer to match “decent, but bordering on tepid, demand.”
Fares are typically driven by four main factors: competition, most of all, then supply, demand and oil prices. “If you look at those drivers, they are, for the most part, on the airlines’ side, which gives them pricing power,” Seaney said.
That doesn’t mean there won’t be good airfare deals on some flights on some routes. And consumers will still see lower prices during off-peak days, such as Tuesday, Wednesday and Saturday departures and off-peak seasons, such as late January and early February. Like this year, summertime fares probably will stay relatively high, he said.
Airline mergers can also affect fares, and a huge one could take place early in 2013. American Airlines and US Airways are in talks about combining.
The general consensus among consumer advocates is that airline mergers aren’t good for passengers.
“Any time you have two big airlines merging, that means consumers have less choice and competition is reduced, which only translates to higher prices,” said Charlie Leocha, director of the Consumer Travel Alliance.
However, a bit of new evidence bucks that conventional wisdom. Despite four megamergers in the U.S. airline industry during the past seven years, fares have not increased significantly, just 1.8 percent per year, according to a December report from professional services firm PwC. In fact, average domestic fares decreased 1 percent from 2004 to 2011 when inflation is factored in, the report found.
Fliers know full well, however, that the fare isn’t all that counts nowadays. There are those fees.
Fees get makeover
The most noticeable trend in recent years with airline fees is that there are more of them: fees for checked bags, aisle seats, onboard meals, among many others.
“What we hear is that people pay their fare and get to the airport and feel they’re constantly being nickeled-and-dimed to death for things that used to be included,” said Kate Hanni, founder of FlyersRights.org.
The top five U.S. carriers alone generated more than $12 billion in fees in 2011, with even more expected through 2012, according to the PwC report.
What consumers call fees, airlines call “unbundling” — making a la carte choices from services that used to be included in the fare.
A likely trend for 2013 might be called “rebundling,” airlines packaging a few now-optional services and charging for a tier of service.
“The airline industry is in a period of transition regarding the pricing of its products,” said Jay Sorensen, president of IdeaWorks, an airline consultant. “Airlines will offer fare products, such as basic, basic-plus and comfort, and allow consumers to purchase their desired level of comfort.”
American Airlines kicked things off in December by introducing packages of airfare upgrades available on round-trip flights. For example, its Choice Essential tier will get you a checked bag, priority boarding and no fee if you need to change your flight reservation. It costs a flat $68 extra per round trip. Its next tier, for $88, includes those perks plus a 50 percent frequent-flier mileage bonus, same-day flight change, same-day standby and a premium beverage, such as an alcoholic drink onboard.
“It’s sort of back to the future,” Seaney said. “It’s taking those unbundled bundles and putting them back in the fare, so you don’t have this perception of nickel-and-diming.”
Gadgets on board
It was about a year ago that actor Alec Baldwin was kicked off a plane before takeoff in Los Angeles. He reportedly refused to halt his smartphone playing of “Words With Friends,” an electronic word game like Scrabble.
Baldwin and the flying public might get good news during 2013.
The Federal Aviation Administration will be reviewing its policy that forces passengers to turn off their portable electronic devices, such as smartphones, laptops, tablet computers and e-readers, during takeoffs and landings — technically, below 10,000 feet.
Pressure in Washington, D.C., is mounting.
In December, both the Federal Communications Commission and Sen. Claire McCaskill, D-Mo., urged the FAA to finally allow electronic devices during takeoffs and landings.
McCaskill, a member of the Senate committee with jurisdiction over communications and aviation policy, points out the “absurdity” of the ban, especially given the FAA now allows pilots to use iPads to replace their paper flight manuals in the cockpit.
“The current rules are inconvenient to travelers, don’t make sense and lack a scientific basis,” McCaskill said in a statement, adding that she is “prepared to pursue legislative solutions should progress be made too slowly.”
It’s an open secret that many people don’t turn off their phones and portable devices when told to on a plane, Seaney said.
“The bottom line is that if it was dangerous, they would confiscate your phones as you got on the plane,” he said.