Failing airlines, high gas prices shouldn't sway 2006 travelers

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As we open the door to 2006, one thing is glaringly obvious about U.S. travelers - they have Superman-like tenacity.

Whether it is terrorist attacks, skyrocketing gasoline prices, unprecedented natural disasters or a weak dollar, Americans continue to venture away from home on trips for pleasure. And it appears 2006 will see no noticeable change to that trend.

According to the Travel Industry Association of America, there are several aspects of travel that have a strong outlook, as 2005 leisure travel was up four percent and total travel spending was up eight percent. TIA predicts these upward trends will continue in 2006, as air travel and hotel occupancy have already exceeded pre-Sept. 11, 2001, numbers in many parts of the U.S.

Still, the entire travel industry continues to be in a state of flux, with major airlines on the verge of shutting down completely or merging, discount carriers continuing to push the ticket-price envelope and online ticket agencies starting to face the same challenges non-virtual travel agents faced recently.

The cost of travel

Over the last few years, travelers have been waiting for the proverbial other shoe to drop, with expectations of large increases in airfare. And while most travel experts predict that airfares will go up a few percentage points this year, travel journalist and commentator Christopher Elliott said it’s still anyone’s guess, but he believes travelers’ wallets won’t be taking a big hit this year, at least.

"Anyone who thinks they know what will happen with airfare is crazy," Elliott said. "Right now, the consensus is they will go up, but probably not so much."

The price of a domestic ticket is expected to increase by 3-6 percent this year, according to analysis by American Express Business Travel.

Those who seek to travel in the comfort of their own automobile took an expensive hit in 2005, as national gas prices increased nearly 30 cents per gallon for unleaded, according to the American Automobile Association. The average price increased from $1.86 a gallon in Dec. 2004, to $2.17 in Dec. 2005.

Still, the price of gas has taken a marked downturn in past months, as the national average for a gallon of gas was near $3 in the summer of 2005. As an added plus for non-plane travelers, Amtrack and Greyhound have each added routes and kept prices down for those interested in traveling via train or bus.

Airline woes

Since 2001, the airline industry has lost nearly $34 billion, with several major airlines under bankruptcy protection. With Northwest, Delta and U.S. Airways among airlines that have filed for protection from their debts, more than half of U.S. travelers will fly on a bankrupt airline in 2006.

"I think that fewer airlines are inevitable and I don’t know if that will result in higher fares, said Elliott. "There’s even been talk about Delta liquidating."

While major carriers suffer from myriad troubles, especially rising fuel costs, it’s the discount carriers that are keeping prices down, said Elliott. Nearly every large market has discount airlines - like Southwest - that will keep ticket prices low, forcing the major carrier’s hands.

"The discount airlines have set the pricing, really," Elliott said. "Southwest is still sitting pretty and making a tidy profit. This is all good news to people who want to fly next year."

So while many major airlines will likely, or already have scaled back on flights, in order to help increase demand, the discount carriers will continue to pick up the slack and set the pace in 2006, keeping prices for airline tickets in the same ballpark as 2005.

Internet travel agents

A few years back, neighborhood travel agents were dealt a severe blow by online travel agents like Travelocity, Expedia and Orbitz. Now, it appears the online travel agents will taste some of their own medicine, as travel search engines begin moving to the forefront of the cyber-travel world.

Travel search engines like Sidestep, Kayak, and Farechase have created a different model than traditional online travel agents. Whereas Expedia will offer a live person and advice to a traveler and charge a small fee for their service, the travel search engines are free of charge, making their money from referrals and advertising.

The main difference between travel search engines and online travel agents is this: The search engine will help you find the airfare, hotel room, or rental car you’re after, and send you through to the airline, hotel chain or car-rental business to make your purchase, while travel agents will book it all for you, but for a small fee.

Still, while travel search engines and online travel agents offer a wide variety of choices for flyers, they won’t have them all, as several airlines, like Southwest, only provide online fares via their own Web sites.

"I still have yet to hear a good reason why people need to go to an online travel agent when they could go right to the source," Elliott said. "This will definitely be a big change this year."

2006 travel tips

If there’s but one major piece of advice for air travelers in 2006, it’s this: Start using those frequent flyer miles.

"Burn, baby, burn. You have got to get rid of those right now," Elliott said. "Miles don’t appreciate in your account even in the best of circumstances, and these aren’t the best of circumstances.

"Right now, I’d say take them all and turn them into something you can use like free tickets."

Also, as stated earlier, many travelers will find themselves booked on flights with airlines that are in the midst of bankruptcy proceedings. This should be a non-issue for most travelers, especially if they take a few precautions.

For instance:

"Airlines will come out with a fare, but then be forced to lower it as the day of the flight arrives," Elliott said. "It's like they're playing a game of chicken with the passengers, and whoever blinks first wins. Usually, it’s the carrier who blinks."

Fast fact

Screening procedures at security checkpoints in airports are changing. New changes will allow passengers to carry on small tools such as screwdrivers, wrenches, and pliers smaller than seven inches and scissors with a cutting edge of four inches or less. Lighters still will be banned from carry-on luggage.

Any opinions expressed above are those of the writer and do not necessarily represent the views of the management.