As demand creeps up, so do air ticket prices By Dan Reed, USA TODAY No one is trumpeting a dramatic recovery, but the long-delayed spring thaw= =20 in air travel demand appears to have begun. Northwest Airlines, frequently the spoiler in airlines' attempts to raise=20 prices, matched on Monday a $5 across-the-board increase begun by American= =20 and United for trips starting June 1. The raise, also adopted by Delta,=20 Continental, US Airways and others, should have little impact on what=20 fliers pay. It substitutes for a $2.50-a-segment security fee suspended by= =20 Congress until October. Most passengers will see no increase. The biggest=20 increase will be $10 round trip. But if demand, still soft by historic=20 standards, wasn't improving at least modestly, analysts say even that=20 almost imperceptible price increase would have been impossible. "For those= =20 that have bemoaned the industry's lack of pricing power, today is your=20 day," J.P. Morgan analyst Jamie Baker wrote Monday in a report to clients.= =20 "Airfares =97 at least from the carriers' point of view =97 are higher." Air= =20 Transport Association data show that weekly domestic passenger traffic=20 numbers turned negative on a year-over-year basis in early February, when=20 the nation went to Code Orange security status. Demand bottomed out the=20 week of April 6, when U.S. troops were bearing down on Baghdad. But demand has been rebounding ever since. During the week of April 28,=20 domestic passenger demand came in higher than the year-ago period for the=20 first time, and has remained higher than the year-ago levels. Since=20 Baghdad's fall, carriers report that their previously anemic summer=20 bookings are picking up nicely. "All the relevant industry metrics continue= =20 to move in the right direction," says Baker, referring to rising demand and= =20 fare prices and falling fuel prices and labor costs. "The clouds have=20 parted a bit," American CEO Gerard Arpey said last Thursday at a breakfast= =20 with reporters. "Just in the past two weeks, there have been some positive= =20 signs for our company and our industry." Executives at other carriers also= =20 report modest improvement in demand. But they remember erroneous=20 predictions of a big recovery a year ago, and won't use such words as=20 "trend" or "recovery." Delta is seeing some "slow but steady improvement in= =20 demand" since the fighting stopped, spokesman John Kennedy says. But that's= =20 mainly because of Delta's "fairly aggressive recent fare sale activity,"=20 not "any pent-up demand being released after war." Arpey, however, says even those recent fare sales have featured slightly=20 higher price points than previous sales. On Monday, discount leader=20 Southwest allowed a long-running fare sale featuring round-trip fares of=20 $198 or less to lapse. Southwest's April load factor =97 the percentage of seats filled =97 beat= the=20 April 2002 load factor by 0.3 percentage points despite a 5% increase in=20 capacity. That's not much, but spokeswoman Linda Rutherford said it was a=20 "pleasant surprise." "One has to crawl before one walks," adds industry=20 analyst Sam Buttrick at UBS Securities. The industry is getting close to=20 breaking even on cash flow, meaning airlines will be generating almost as=20 much cash as they spend and should be ahead the rest of this year and in=20 2004, he says. "The final step is actually making money, which I've long=20 held won't happen until 2005." *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.cso.gov.tt TnT Webdirectory: http://search.co.tt *********************************************************