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For holiday travel, buy now?

Posted by Paul Makishima, Globe Assistant Sunday Editor  October 20, 2011 09:45 AM

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Is it time to jump in now if you're planning holiday travel? It looks like the airlines are betting on strong demand this holiday season. Early forecasts suggested the possibility that holiday travel could be a little off this year, but this week the major carriers signaled their confidence by nudging up round-trip fares across most domestic routes.

Delta kicked things off Tuesday with a hike of $4 to $10 on roundtrip flights across most of its US routes, according to Rick Seaney of Farecompare.com. By the next day, all the other major airlines adopted the increases.

Over the past few years, carriers have aggressively cut flights and seats to trim costs and ensure fuller planes and greater cost efficiency, and earlier this month experts noted that some airlines would cut more seats for this holiday season than in years past.

But to return to the big question: Should travelers buy now? Seaney has pointed out that prices have been trending up for the Thanksgiving and Christmas period for a while and says that it's unlikely that the airlines, which are highly competitive, would push fares up without evidence of significant demand.

Southwest, however, ran a sale earlier this month that covered much of the holidays. And earlier this week, Southwest and AirTran announced another sale, matched by some competitors, for travel in the general period, but this one gave a wide berth to the days reasonably near holiday dates. So what to do? It seems the prudent thing would be to not wait and to jump on any news about sales. But it's anyone's guess. Amid this long economic downturn, consumer behavior has not been all that predictable.

The fare hikes are coming as airlines are preparing to announce results for the third quarter, which saw the carriers facing higher fuel costs and the global economic malaise.

This morning Southwest Airlines Southwest Airlines reported a third-quarter loss of $140 million owing to declines in its fuel-hedging bets turned sour when oil prices fell this summer. Excluding hedging losses and other one-time expenses, Southwest would have posted profits of $122 million, or 15 cents per share, beating forecasts by a penny. On Wednesday American Airlines parent AMR reported a loss of $162 million in the period.


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