With jet fuel prices near record highs, airlines that serve Salt Lake City are considering where to trim seating capacity in order to cut costs without driving away customers already put off by rising fares.
Earlier this month, several carriers said capacity — the number of seats they make available — will be flat or down in the final months of this year and in 2012. For passengers, that’s likely to mean fewer flight choices, different aircraft and planes that are fuller than ever.
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Source: The Associated Press
Delta, the dominant airline at Salt Lake City International Airport with a 73 percent share of the market, said it would extend its network capacity cut of 4 percent to 5 percent in the fourth quarter into the first quarter of next year. It plans to reduce capacity by 2 percent to 3 percent for all of 2012.
The airline isn’t ready yet to say how the cutbacks will affect its Salt Lake City airport hub, but change is coming.
But, Delta spokesman Trebor Banstetter said Tuesday, "no market is not going to be affected."
Delta isn’t the only carrier contemplating capacity changes. Southwest, the No. 2 airline in Salt Lake City, has said it might reduce capacity next year. Frontier, which flies between Salt Lake City and its Denver hub, won’t say if local cuts are in the offing until its fourth-quarter and 2012 flight schedules are finished. But it has acknowledged plans for big cuts in Milwaukee and Kansas City.
United Continental Holdings, the parent company of United Airlines, will hold 2012 capacity at this year’s level, which will be down somewhere between 0.8 percent to 0.2 percent from last year, spokesman Mike Trevino said. The carrier will accomplish that by offsetting a decrease in domestic flying with additional international flying.
Only American Airlines, the No. 3 carrier in Salt Lake City, signaled plans for more service at the airport. Starting Dec. 16, American Eagle, its regional affiliate, will add one round trip to Los Angeles International Airport. That will bring the number of daily departures from three to four, spokesman Tim Smith said.
Otherwise, beyond Salt Lake City, American’s domestic capacity will be down 0.8 percent in the quarter that starts Saturday, Smith said. International capacity will rise 3.6 percent.
"We will obviously monitor fuel prices, demand and other factors to determine whether any other capacity changes should be made going forward," Smith said.
The trims come at a time when several airlines have hiked airfares by $6 to $10 per round trip on some U.S. routes. Delta, Southwest and United all have raised ticket prices. So have JetBlue Airways and US Airways, which also serve Salt Lake City.
The increases come at a time when there is already upward pressure on fares. The average ticket price in Salt Lake City was $375 in the first quarter, up 10.6 percent from the same period of 2011, according to the U.S. Bureau of Transportation Statistics.
Look for further increases. The average domestic airfare for the weeks of Thanksgiving and Christmas will be $383, 4 percent higher than last year, according to Expedia, the online ticket booking company.
Jet fuel prices are the airline industry’s biggest expense. This year, the industry’s fuel bill is projected to increase to $54 billion from $39 billion last year, according to the Air Transport Association, a trade group that represents the U.S. airline industry.
"Their 2011 fuel bill is expected to dwarf 2005, despite lower [fuel] consumption," ATA spokeswoman Victoria Day said.
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