Fares take off, but fewer planes do

Ticket prices are on the rise and seats are harder to find as airlines try to claw their way back to profitability by flying fewer, and often smaller, planes.

Faced with soaring fuel costs, carriers are shedding flights and seats to further reduce costs and bring flight capacity more in line with demand. During the first four months of the year, the number of available seats declined 2.7 percent on domestic routes, while growing 3.9 percent in the more lucrative international market, according to the Air Transportation Association.

With fewer seats in the air and consumer demand increasing to rival pre-Sept. 11, 2001, levels, fares are going up. Prices rose an average of 10.5 percent during the first three months of the year, according to the ATA. Planes are also getting a lot more crowded. Four of every five seats were filled with paying passengers in April, and industry officials expect that pace to continue into the summer tourist season. The last time the industry's load factor topped 80 percent was in 1945.

Even Southwest Airlines, which boasts that it is the nation's low-fare leader, increased its ''yields," the industry's equivalent of average fares, 5 percent last year and boosted them another 5 percent during the first three months of this year.

''I would assume we'll continue to see those kind of single-digit fare increases through the rest of the year," said Southwest chief executive Gary C. Kelly.

Prices are likely to keep rising because many airlines are still losing money. Average US fares are 14 percent below where they were in 2001, prior to the Sept. 11 terrorist attacks, the ATA says, but fuel prices have more than doubled since then. Fuel prices were up 28 percent in the first quarter compared with a year ago.

''This isn't a case where the airlines are choking off supply to maximize their profits," said Deborah Meehan, president of SH&E, a Cambridge aviation consulting company. ''Airlines are desperately trying to raise fares because their costs have gone up so much."

Ken Schulman, who travels frequently in his job as associate dean at the Boston University School of Social Work, said he is paying more on coast-to-coast flights and trips to Newark and Cleveland. As planes have become more crowded, the flying experience has also changed, he said.

''I have experienced fewer open middle seats," he said. ''I even have noticed more crowded flights on days that in the past have typically been less full, like midweek and on Saturday."

Barbara McInnis, a vice president at Garber Travel, said it's harder to find seats for customers today, particularly bargain seats that tend to be limited.

The lowest roundtrip fare from Boston to Los Angeles in mid-June on travel website Orbitz.com is currently $375, but last year at the same time it was $309. Fares are also higher to Chicago's O'Hare airport ($55 higher), Atlanta ($121 higher), and Washington-Dulles ($58 higher).

The paring of seats and flights is more dramatic at smaller, regional airports.

FLIGHT PATH View historical photos of Logan Airport and commercial aviation at boston.com/business

Manchester-Boston Regional Airport in New Hampshire saw its seat capacity fall 21.5 percent in the first three months of this year compared with a year ago. The number of flights out of Manchester-Boston dropped 18 percent. And T. F. Green Airport in Warwick, R.I., saw its seat capacity fall nearly 15 percent during the same period, while flights dropped by only 5 percent.

Seat capacity at Boston's Logan International Airport remained steady, primarily because JetBlue Airways and Air Tran Airways have added flights, offsetting reductions at other airlines.

Kevin Dillon, director of Manchester-Boston Regional Airport, said airlines are cutting more seats at smaller and midsize airports as they focus on bigger hubs with more passengers.

American Airlines, the world's largest carrier, illustrates industry trends. It plans to cut US capacity this year by 4 percent while increasing the number of seats on international flights, for an overall decrease of 1 percent. Starting in July, it plans to put 27 jets in temporary storage.

Locally, American is running 95 flights a day out of Logan, down about 5 percent compared with last year at this time. At T.F. Green, American is still running three daily flights to Chicago, but it has shifted from jets that seat 148 passengers to jets that seat 50. American has also eliminated a daily flight to Dallas-Fort Worth.

''That's what the market told us it made sense for us to do," said Ned Raynolds, an American spokesman.

In the first quarter, American reduced overall capacity by 0.2 percent while increasing its average fare equivalent by 8.2 percent. American reported a $92 million loss during the period, compared with a loss of $162 million the year before. But American said its fuel costs were up $349 million compared with a year ago.

At Logan, the 1 percent drop-off in seat capacity hasn't affected passenger levels. But the steeper drop-offs at Manchester-Boston and at T.F. Green have contributed to a falloff in passenger traffic, an indication that travelers may be migrating to Logan where flights and fares are more plentiful.

At Logan during the first quarter, passenger traffic increased 4.5 percent to 6.3 million travelers. At Manchester-Boston, passenger traffic tumbled 5.6 percent to 886,831, the airport's first quarterly loss of passengers since 1995. At T.F. Green, passenger traffic dropped 2.9 percent during the first three months of this year to 1.2 million. Last year, Green had its best year ever in terms of passenger traffic.

Officials at Manchester-Boston were so concerned about the trend that they added Boston to the name of the airport last month to better communicate the airport's proximity to the Boston market.

Thomas Kinton, aviation director at the Massachusetts Port Authority, which runs Logan, said his airport should continue to benefit as airlines slim down. He predicted airlines will keep reducing seat capacity and increasing fares until jet fuel prices fall substantially.

''They've disciplined themselves," he said. ''They're going to keep it tight."

Bruce Mohl can be reached at mohl@globe.com.