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Airfares climb, routes disappear as fuel prices rise

March 9, 2012 | Hogan Keyser
gas_price_graph.jpgTicket prices will stay high and planes will stay crowded in the immediate future, the Federal Aviation Administration says.

March 8, 2012 by Hugo Martin via -- Airfares are rising, planes are packed, and carriers are abandoning less-profitable routes.

What's to blame? Climbing fuel prices.

And there will be no relief in the immediate future, according to an analysis released by the Federal Aviation Administration.

"Planes will remain crowded," said the report released Thursday, and "shrinking capacity will further lift fares higher in 2012."

The nation's airlines buy about 48 million gallons of fuel each day at a price that jumped nearly 40% in the last year.

A gallon of jet fuel sold for an average of $3 in 2011, up from $2.15 in 2010. And although airlines are flying more energy-efficient planes, fuel represents about 35% of the industry's total operating costs.

"Fuel prices are volatile," said John Heimlich, chief economist for Airlines for America, an industry trade group based in Washington. "Fuel is our biggest cost, and we don't know what it's going to do."

Airfares jumped about 8% to $346 on average in 2011, from $320 in 2010, according to Airline Reporting Corp., which processes ticket transactions for 190 airlines worldwide. Last year the industry put through nine fare hikes.

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