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Thu, Jun 19, 2003

Air Fares May Be Recovering

International Uptick Encouraging to Industry

Although domestic airfares declined, both from April and as compared to the prior May, international-flight airfares nudged upward in May, according to the Air Transport Association.

Domestic fares were down 4.3% since last year's May numbers, continuing an umbroken trend in 2003. International fares, though, after seeing declines in March and April, again started to rise, versus same-month 2002 numbers, rising 3.8%.

Is that good, or bad?

Whether these numbers translate into profits remains to be seen, however. Fuel, labor, and "security" costs figure heavily into the mix. Those, balanced against load factors (for both seats and cargo), will tell more of the story.

What about consumers?

Fares aren't the only costs to consumers, though. The ATA notes, "Depending on your itinerary, a substantial amount -- up to 50 percent -- of your ticket price includes taxes levied by local, federal, or foreign governments. The stated purposes of the taxes vary widely, including maintenance and enhancement of the nation's airports and airways and funding for various federal agencies (e.g., APHIS, Customs, INS, TSA)."

FMI: www.airlines.org

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