Airlines see profitable summer ahead

By DAVID KOENIG
June 18, 2011, 4:56pm

DALLAS (AP) – This promises to be a moneymaking summer for the US airlines, with planes full of passengers paying higher fares than a year ago. But there could be an autumn chill in the air.

Leisure travelers say they're cutting back on travel because of high-priced tickets, concern about the economy, and the need to spend more for everything from food to gasoline.

Airlines are planning to reduce flights once summer ends. Some are already offering sales to fill their planes when vacation season is over.

"We are worried about what happens after Labor Day,'' says Helane Becker, an analyst for Dahlman Rose & Co. "We're going to see less demand and more discounting.''

Economists have lowered growth forecasts after a bunch of recent bad economic news. Unemployment remains above 9 percent. Retail sales are slumping for the first time in nearly a year. Becker worries that could foreshadow a drop in leisure travel, offsetting continued strength in business travel.

People who bought their airline tickets before those grim headlines helped push May air traffic above last year's levels, especially on international routes. Discount airlines including Southwest and JetBlue grabbed a bigger share of the US market as vacationers and even business travelers tried to save money.

Nancy Ruby, a customer-service trainer for a nationwide retailer, used to fly United but was taking Southwest from Dallas to Baltimore this week.

"It's not a corporate policy, but my company has encouraged us to book as far in advance as possible to get lower fares,'' she said. And she's been traveling on Southwest more often to avoid fees on checked bags and reservations changes.

Travelers like Ruby helped Southwest boost its May traffic 10.9 percent over a year ago. JetBlue increased traffic 10.6 percent, but growth was much slower at Delta and American and traffic fell slightly at United and Continental.

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