Seat tallies for trans-Atlantic flights drop


U.S. carriers led by United Continental Holdings are shielding their lucrative trans-Atlantic business from the worst of Europe's economic slump, after shrinking the supply of seats to support higher fares.

Summer ticket prices to western Europe have risen an average of 3 percent from 2011, according to Travelocity.com. Demand for U.S.-to-Europe trips also is holding up, with ticket sales climbing 5.9 percent to 1.31 million for the peak travel months, data compiled by Airlines Reporting Corp. show.

For Las Vegans, travel now will be much less expensive than travel later in the summer.

Based on tickets it has sold to 10 cities in Europe, travel website Expedia found that fares from Las Vegas increase as the summer wears on. Tickets sold for travel in June were 3 percent less than they were in the same month last year, while airfares in July were 2 percent lower than July 2011. But in August, a popular month for locals to be somewhere cooler, tickets go up 2 percent, followed by a 12 percent gain in September.

Results varied widely depending on the month and destination. For example, tickets to Dublin, Ireland sold for 53 percent more for travel in August, while trips in July to Oslo, Norway, were 39 percent cheaper. Frankfurt, Germany, which is connected to Las Vegas by nonstop flights, was the only city to post fare increases for as many as three of the four months.

Flights across the Atlantic are the biggest overseas market for U.S. airlines, with traffic that can roughly double in summer months from wintertime lows, data compiled by Bloomberg News show. Cutting capacity helps carriers maintain pricing power, especially with European business travel at risk from the region's economic slowdown.

Delta Air Lines, traditionally the first U.S. carrier to report operating results each month, probably will give the initial glimpse at summertime flights to Europe next week with its traffic report for June. After paring capacity, it filled 84.6 percent of seats on trans-Atlantic flights in May, up 0.9 percentage point from a year earlier, even as traffic fell.

"All indications are that Europe is holding up well, David Fintzen, an analyst at Barclays Capital in New York, said. "You've seen underlying demand trends get a little bit stronger over the last couple of months."

That pattern shows up in the information from Airlines Reporting, which clears transactions for flights booked on U.S. airlines. That gives the Arlington, Va.-based company a look at future bookings instead of the backward snapshot provided by carriers.

Although the number of tickets sold for each of the three summer months increased, the data also show challenges as airlines grapple with slowing economic growth. Fares for both June and July bookings declined before an August increase, Airlines Reporting data showed.

Flights from the U.S. to western Europe are averaging $1,315 for May through September, up about 3 percent from the same period in 2011, Travelocity data show.

Ticket prices, pressured by competition in the past, are benefiting from industry consolidation and a growing number of global marketing alliances, said Courtney Scott, editor at Southlake, Texas-based Travelocity.

Delta bought Northwest Airlines in October 2008 and was the world's largest carrier until United Airlines combined with Continental Airlines to form United Continental in 2010. Southwest Airlines, the biggest U.S. discount carrier, acquired AirTran Holdings in May 2011.

Jet-fuel prices dropped 7 percent to $3.03 a gallon in May, paring a first-quarter surge, without relaxing availability of seats overall.

The drop, which means lower costs for airlines, has helped spur gains in their shares.

The Bloomberg U.S. Airlines Index of 10 carriers climbed 23 percent this year through Wednesday, with Atlanta-based Delta and United Continental among the top five performers.

Las Vegas Review-Journal reporter Tim O'Reiley contributed to this report.

 

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