Trans-Atlantic airfare pinch

High cost of jet fuel, weak dollar driving up prices across pond

By Chris Walsh, Rocky Mountain News (Contact)

Published March 7, 2008 at 11:28 a.m.
Updated March 7, 2008 at 11:28 a.m.

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Photo by George Kochaniec Jr. © The Rocky

Travelers wait at Concourse A at DIA for a Lufthansa flight to Germany March 6, 2008.

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As if the struggling U.S. dollar isn't enough of a setback for travelers considering a jaunt to Europe.

A sharp spike in fuel prices, coupled with strong demand on both sides of the Atlantic, has led to an increase in airfares to many European destinations, making it noticeably more expensive to take a trip across the pond this year.

Fares to Europe are up an average of 10 percent, experts say, and some routes have skyrocketed much higher. Costs for flights between Denver and London this spring, for instance, have risen as much as 30 percent, despite the fact that United Airlines is launching service on the route later this month.

In many cases, the fare hikes equate to $100 to $200 more a ticket, which can put a big dent in the family vacation budget.

"There are some routes I've seen where the fares have actually been lower, but some are much higher," said Matt Radack, industry-relations manager at Vayama.com, which focuses on selling international fares. "In general, though, we're seeing fares up about 10 percent."

The main factor at work?

The price of jet fuel, which has soared a jaw-dropping 60 percent during the past year worldwide, according to the International Air Transport Association. That's added millions of dollars in extra costs for airlines.

Carriers are scrambling to offset those costs and have turned to raising fuel surcharges - which are added onto the base fare - by $100 or more for many international routes. So the price consumers actually pay, in some cases, can be double the listed fare before taxes, fees and fuel surcharges.

"The biggest percentage of the increases is tied to those fuel charges," said Tom Parsons, who runs travel site BestFares.com. "Landing fees to some European destinations also have gone up. People are breaking open their piggy banks to get there."

In general, domestic and international fares have been on the rise during the past two years, as the airline industry adjusts to numerous challenges.

For consumers, though, the increases to Europe hit particularly hard. The U.S. dollar has fallen to new lows against the euro. Many cities in Europe were already expensive; the currency exchange makes them more so.

Still, that's done little to dampen demand.

Flights between the United States and Europe are generally full, even as airlines boost trans-Atlantic capacity.

Some Americans are opting for cheaper vacations closer to home, but many are still shelling out the big bucks for trips to cities such as Rome and Paris. More significant is the fact that swarms of Europeans are taking advantage of the weak U.S. dollar by booking trips to America, where their money goes a lot further than it did just a year ago.

"We've got hundreds of thousands more Europeans coming to the United States," said George Hobica, founder of AirfareWatchdog.com, which compiles information on fare deals for consumers. "They're coming here for cheap vacations. And they're not staying here for good, so they're taking up airline seats in both directions."

The airlines, therefore, can get away with charging higher prices.

"The food and the shopping and the hotels here are cheap for (European visitors), so they don't mind paying more for the airfare," Hobica said.

Denver has had a couple of solid deals this spring, such as round-trip fares to Germany for less than $400. But most of those are long gone. Many fares through May will set you back $800 or more, and most routes this summer are going for $1,200 to $1,500.

So what's a cash-strapped traveler to do?

Several destinations, such as Dublin, Ireland, and Paris, are among the cheaper options from Denver.

Although fares from Denver to London have gone up this year, they're still on the lower end of the spectrum for Europe. London also offers a wealth of low-cost service to other cities in Europe via the likes of Ryanair and EasyJet.

Consumers can wait a little longer, too.

Some experts say, in general, that fares to Europe might have hit a ceiling and could come down. Additionally, airlines sometimes offer summer sales on certain routes if demand doesn't materialize as expected.

"I would be surprised if leisure fares for (summer travel) never came down," said John Rauser of Farecast, which tracks ticket prices and offers fare predictions for specific routes. "I don't think it'll be a dramatic decrease, but often we'll see late-season sales, as departure dates near."

walshc@RockyMountainNews.com or 303-954-2744

Big ticket

Airfare experts say average ticket prices to Europe are up roughly 10 percent compared with last year, and in some cases much more. Sample fares from Denver in mid-July to:

Athens, Greece $1,527

Amsterdam, Netherlands $1,355

Barcelona, Spain $1,332

Frankfurt, Germany $1,296

Dublin, Ireland $1,138

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