Tuesday, December 27, 2011

What Will 2012 Bring In Air Travel? Fewer Flights Still Likely, Mobile Reservations On The Rise

(CNN) -- It's the end of 2011, so you know what that means. It's time for everyone to come out of the woodwork with their predictions for 2012.

So what will happen in the world of air travel?

Here are some thoughts on what the coming year might have in store. Fares will go up . . . or down The one thing everyone wants to know is whether fares will keep going up. We've seen plenty of increases in 2011, but will that continue? That really depends on two things: passenger demand and fuel prices.

Despite a still-shaky economy, demand for flights has been quite strong, and that has enabled airlines to keep raising fares. If demand continues to strengthen, then you can bet we'll see more increases in the new year. If it starts to drop off, then fares will likely start to fall, or at the very least, stay the same.

The one thing that can get in the way of that plan is high fuel prices. If prices spike higher, then airlines will be forced to raise fares regardless of demand. If that happens, then airlines will also have to cut the number of flights. Still holding back Fewer flights, however, will likely be the case no matter what happens with fuel.

Airlines have shown a great deal of discipline in terms of holding back the number of seats and flights they've put out there over the last few years, and that isn't likely to change. In fact, as Holly Hegeman, founder of PlaneBusiness.com notes, there are a couple of events that will directly affect that.

"In 2012, U.S. airlines will continue to reduce capacity both domestically in the U.S. and on international flights," she notes.

"Specifically, Southwest Airlines will be removing service in many AirTran markets as the airlines' merger moves forward, and American Airlines will cut back on its service in certain markets as part of its bankruptcy restructuring. Excess capacity across the Atlantic is also being trimmed."

You can expect fewer flights to smaller cities in general. That's the continuation of a trend we've seen for several years. Fortunately, not all is gloom and doom. There are some bright spots when it comes to technology. More mobile I asked Henry Harteveldt, travel industry analyst at Atmosphere Research Group, for his predictions for the new year since he always has his ear to the ground.

His first thought? He expects that 2012 will be "the first year that airlines see a meaningful number of reservations made through mobile devices."

That seems like a good bet. Smartphones and tablets are gaining ground rapidly, and airlines have raced to improve functionality. Next year might be the year when things really heat up, as airlines continue to make it easier to do business with them while on the road. No end to fees While some travelers wish fees would disappear, that's not going to happen. Some new rules from the federal government will make it a little easier to find fee information up front, but fees are proving to be a great way for the airlines to be able to offer lower base fares and then let people pay more if they want more.

That doesn't mean the experience will remain exactly the same when it comes to buying tickets.

Airlines will, in Harteveldt's opinion, "start to get more creative about bundling."

Frontier is ahead of the curve on this one, offering different fare categories that include different amenities bundled together as a package.

So there you have it. I actually think flying will be less frustrating next year and here's hoping all of your journeys are smooth in 2012.

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