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Airlines are paying less for jet fuel these days. But don't expect that price drop to translate into Thanksgiving travel bargains for you.

Rather than cut fares, airlines are turning fuel savings into cash for acquiring aircraft, upgrading software, rewarding workers and attracting long-term investors, according to John Heimlich, chief economist for Airlines For America, A4A, a trade group.

The major carriers that filed for bankruptcy during the Great Recession have learned to be more "fiscally responsible," Heimlich told reporters Thursday. After years of fighting with creditors, "they are paying their bills," he said.

In the long run, "enhanced creditworthiness" will create a more stable industry that can better serve travelers, Heimlich said.

But for now, those bill-paying efforts are sending air fares higher, with carriers pushing them up five times this year, according to Farecompare.com.

While A4A notes that fares are lower than in 2000 after adjusting for inflation, consumers might point out that today's higher fees and taxes have driven up total travel costs. In addition, in many markets, fliers have fewer choices following a merger wave that combined American Airlines with US Airways; United with Continental; Delta with Northwest; and Southwest with AirTran.

Business

Regulators And Airlines Fight Over Fares, Fees And Fairness

Heimlich points out that the consolidated industry needs additional revenue to keep pace with higher operating costs for aircraft loan payments, rents, landing fees, new software and skilled labor.

In fact, the industry's capital expenditures for the first nine months of this year amounted to more than $1 billion per month — the highest rate of reinvestment in 13 years, he said. Customers are benefiting from those investments by getting more Wi-Fi options, updated gate areas, new aircraft and better kiosks.

These upgrades may attract more travelers in the future, but for now, domestic air traffic growth has been restrained, still running below pre-recession levels.

Heimlich predicts that this year's improving economy will help nudge up air travel to 24.6 million passengers over the Thanksgiving travel period, an increase of 1.5 percent from last year. But that number is still about 6 percent lower than the Thanksgiving period before the recession hit, he said.

He says this year, Sunday, Nov. 30, will be the busiest air travel day of this year, followed by Wednesday, Nov. 26.

George Hobica, founder of Airfarewatchdog.com, says bargain hunters have better luck finding cheap flights when they are willing to accept "middle seats next to the lavatory, red-eye flights, or 5 a.m. departures."

air travel

Airlines

When Don Sage of Concord, N.H., learned his electric bill could rise by as much as $40 a month he got flustered. He and his wife make do on a bit less than $30,000 a year in Social Security payments, and they pay close attention to their electric bills.

"When the invoice comes in the mail to get paid, I have a target amount that we can fluctuate up or down, based on our fixed budget," Sage says. "They don't need my permission to hike up their rates, but the fact is we're the ones that are paying these increases."

Utilities in New England have announced electricity rates hikes on the order of 30 percent to 50 percent, making prices some of the highest in the history of the continental United States.

For Sage and other consumers, these changes seem to have come out of nowhere, but in reality, they have been a long time coming. Between the years of 2000 and 2013, New England went from getting 15 percent of its energy from natural gas to 46 percent. That's dozens of power plants getting built.

But the pipelines to supply those power plants? Not so much.

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At the same time, with the fracking boom just a few hundred miles west driving down gas prices, more and more homeowners were switching to natural gas for heating.

So now when it gets cold and everyone turns on their heat, the pipelines connecting New England to the Marcellus Shale are maxed out.

Power plant operators are left to bid on the little bit of gas that's left over for them, and the prices can get out of hand.

"In New England, this winter, based on what's been recently trading, is likely to have the highest natural gas prices on planet Earth," says Taff Tschamler, chief operating officer of energy supplier North American Power.

Gas for January delivery is trading at nearly $19 per million BTUs. Gas in Japan, which relies entirely on imported gas and often has the world's highest prices, is forecast to cost less than $18 this winter.

Big pipelines in New England are on the drawing board, but they won't be built until 2018 at the earliest — and that's only if they don't get swamped by local opposition.

i i

One proposed solution for New England's energy price spike problem: Importing more liquefied natural gas and feeding it into the pipeline network on the other side of the region's bottleneck. Sam Evans-Brown/New Hampshire Public Radio hide caption

itoggle caption Sam Evans-Brown/New Hampshire Public Radio

One proposed solution for New England's energy price spike problem: Importing more liquefied natural gas and feeding it into the pipeline network on the other side of the region's bottleneck.

Sam Evans-Brown/New Hampshire Public Radio

How To Cope

So what's a region to do? For one, if you import gas and plug it into the pipeline network at a different spot, you can avoid the bottleneck.

Distrigas, New England's only liquefied natural gas import terminal, is just north of Boston. Tony Scaraggi, the company's vice president of operations, says even with last year's frigid winter, New England only hit its maximum pipeline capacity for 40 days.

"That's equivalent to like, two and a half to three LNG tankers coming in. So you gotta compare that to the cost of a $2 to $3 billion pipeline," Scaraggi says.

He says burning more expensive foreign natural gas for those 40 days is still cheaper than building an oversized pipeline.

The environmental community is weighing in on the question, too.

Peter Shattuck with Environment Northeast put out a paper arguing the region could save money by using less power.

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New York Says It's Time To Flip The Switch On Its Power Grid

"If demand for gas remains low, because of things like energy efficiency, distributed generation, renewable heating technologies like heat pumps and biomass, we may not need any infrastructure overall," Shattuck says.

So while it's certain that some pipelines will get built, the big question is how much additional capacity, and who will pay.

A plan from the six New England governors to subsidize bigger pipes was tabled recently when Massachusetts announced it wanted to study the question further before committing.

Ultimately, whether electricity prices continue to rise in New England next winter and the winter after that will come down to weather.

"At any rate, what I think we're hoping for is that the good Lord who protects drunks and the United States will also protect New England," says Peter Brown, an energy attorney with the law firm Preti Flaherty.

In other words, pray for a warm winter.

Airlines are paying less for jet fuel these days. But don't expect that price drop to translate into Thanksgiving travel bargains for you.

Rather than cut fares, airlines are turning fuel savings into cash for acquiring aircraft, upgrading software, rewarding workers and attracting long-term investors, according to John Heimlich, chief economist for Airlines For America, A4A, a trade group.

The major carriers that filed for bankruptcy during the Great Recession have learned to be more "fiscally responsible," Heimlich told reporters Thursday. After years of fighting with creditors, "they are paying their bills," he said.

In the long run, "enhanced creditworthiness" will create a more stable industry that can better serve travelers, Heimlich said.

But for now, those bill-paying efforts are sending air fares higher, with carriers pushing them up five times this year, according to Farecompare.com.

While A4A notes that fares are lower than in 2000 after adjusting for inflation, consumers might point out that today's higher fees and taxes have driven up total travel costs. In addition, in many markets, fliers have fewer choices following a merger wave that combined American Airlines with US Airways; United with Continental; Delta with Northwest; and Southwest with AirTran.

Business

Regulators And Airlines Fight Over Fares, Fees And Fairness

Heimlich points out that the consolidated industry needs additional revenue to keep pace with higher operating costs for aircraft loan payments, rents, landing fees, new software and skilled labor.

In fact, the industry's capital expenditures for the first nine months of this year amounted to more than $1 billion per month — the highest rate of reinvestment in 13 years, he said. Customers are benefiting from those investments by getting more Wi-Fi options, updated gate areas, new aircraft and better kiosks.

These upgrades may attract more travelers in the future, but for now, domestic air traffic growth has been restrained, still running below pre-recession levels.

Heimlich predicts that this year's improving economy will help nudge up air travel to 24.6 million passengers over the Thanksgiving travel period, an increase of 1.5 percent from last year. But that number is still about 6 percent lower than the Thanksgiving period before the recession hit, he said.

He says this year, Sunday, Nov. 30, will be the busiest air travel day of this year, followed by Wednesday, Nov. 26.

George Hobica, founder of Airfarewatchdog.com, says bargain hunters have better luck finding cheap flights when they are willing to accept "middle seats next to the lavatory, red-eye flights, or 5 a.m. departures."

air travel

Airlines

Airlines are paying less for jet fuel these days. But don't expect that price drop to translate into Thanksgiving travel bargains for you.

Rather than cut fares, airlines are turning fuel savings into cash for acquiring aircraft, upgrading software, rewarding workers and attracting long-term investors, according to John Heimlich, chief economist for Airlines For America, A4A, a trade group.

The major carriers that filed for bankruptcy during the Great Recession have learned to be more "fiscally responsible," Heimlich told reporters Thursday. After years of fighting with creditors, "they are paying their bills," he said.

In the long run, "enhanced creditworthiness" will create a more stable industry that can better serve travelers, Heimlich said.

But for now, those bill-paying efforts are sending air fares higher, with carriers pushing them up five times this year, according to Farecompare.com.

While A4A notes that fares are lower than in 2000 after adjusting for inflation, consumers might point out that today's higher fees and taxes have driven up total travel costs. In addition, in many markets, fliers have fewer choices following a merger wave that combined American Airlines with US Airways; United with Continental; Delta with Northwest; and Southwest with AirTran.

Business

Regulators And Airlines Fight Over Fares, Fees And Fairness

Heimlich points out that the consolidated industry needs additional revenue to keep pace with higher operating costs for aircraft loan payments, rents, landing fees, new software and skilled labor.

In fact, the industry's capital expenditures for the first nine months of this year amounted to more than $1 billion per month — the highest rate of reinvestment in 13 years, he said. Customers are benefiting from those investments by getting more Wi-Fi options, updated gate areas, new aircraft and better kiosks.

These upgrades may attract more travelers in the future, but for now, domestic air traffic growth has been restrained, still running below pre-recession levels.

Heimlich predicts that this year's improving economy will help nudge up air travel to 24.6 million passengers over the Thanksgiving travel period, an increase of 1.5 percent from last year. But that number is still about 6 percent lower than the Thanksgiving period before the recession hit, he said.

He says this year, Sunday, Nov. 30, will be the busiest air travel day of this year, followed by Wednesday, Nov. 26.

George Hobica, founder of Airfarewatchdog.com, says bargain hunters have better luck finding cheap flights when they are willing to accept "middle seats next to the lavatory, red-eye flights, or 5 a.m. departures."

air travel

Airlines