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Chicago: So far, US airlines have coped well with a painful economic downturn, but a sharp decline in gasoline prices soon may lure travellers off planes and into cars for short-haul trips.
That would be a departure from a long-held public perception that flying - while increasingly expensive - still makes sense because the cost of driving is almost as bad and driving takes longer.
But with gas prices down more than 15 per cent since July and air fares steady, travellers look likely to rethink that logic, said Rick Seaney, chief executive of air fare research site FareCompare.com.
"People are sensitive [to financial concerns] and when they're sensitive, I think they're going to check all their options," Seaney said.
The US Energy Department reported that the average US gasoline price fell this week below $3.50 a gallon for the first time since mid-April. That's down from a record high of $4.11 a gallon in July, but still up about 25 per cent from a year ago.
No cut
Major US airlines, however, have initiated 15 successful fare hikes or fuel surcharges this year, and none has cut fares significantly even as the price of jet fuel has plunged nearly 40 per cent since July, according to FareCompare data.
Airlines also have been aggressively adding new and unpopular fees for items and services like checked baggage that once were complimentary.
For the first time in years, driving is becoming a more appealing option for travellers on shorter trips, experts say. "I'd be a fool not to say some people will drive," said Terry Trippler, travel expert at TripplerTravel.com.
"Some of them might look at it for Thanksgiving," he said.
What's less clear is whether airlines would suffer if they lost passengers to cars. The industry is rapidly downsizing, making good on promises issued in the spring to slash capacity on less profitable routes in a bold effort to save money.
As a result of the smaller supply of available seats, planes remain nearly full. AMR Corp's American Airlines reported a September load factor of 76.6 per cent. UAL Corp's United Airlines said its load factor was 79.7 per cent in September.
With planes that full, airlines have little incentive to pass any fuel savings along to customers. Carriers lost billions of dollars in the first half of 2008, wiping out the gains of recent years. The main culprit was volatile energy prices.
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