But Rising Fuel Costs, Fewer Seats Mean Low Prices Won't Last

Be prepared for a bursting bubble. Even as fuel prices continued to climb, the cost of purchasing a domestic airline ticket actually fell in the second quarter, according to figures released Tuesday by the US Department of Transportation.

The Associated Press reports the average price for a domestic roundtrip ticket fell 4.5 percent in the second quarter compared to the same period in 2006, to $326. The Bureau of Transportation Statistics notes that amount is nearly six percent less than the all-time second-quarter high of $346 in 2000, but is also above the 2005 Q2 average of $306.75.

The drop in fares came as airlines struggled with record levels of delays.

Passengers flying from Cincinnati; Anchorage; Greensville-Spartanburg, SC; Knoxville, TN; and Charleston, SC paid the highest average airfares in the nation. Those flying from three major airports in Hawaii, Dallas Love Field, and Chicago's Midway Airport paid the lowest fares.

According to the Air Transport Association, fuel costs accounted for the largest percentage of operating expenses among US carriers, at 25.4%... followed by labor costs at 23.6 percent.

The airlines say the rising cost of petroleum has also driven a spate of recent fare increases -- eight so far this year, the most recent spurred by United Airlines.

Some analysts say that's not the whole story, however, noting reduced capacity also allows airlines to charge more.

FMI: www.bts.gov, www.airlines.org