ABC Hypes Rising Jet Fuel Cost as Memorial Day Travel Approaches
But air travel may increase with higher gas prices while airfares could keep airlines afloat, say experts.

By Ken Shepherd
Free Market Project
May 8, 2006

     ABC News prematurely grounded Americans for this coming Memorial Day with weekend coverage forecasting more expensive airline flights. But while airfares are higher than months ago, higher gas prices are actually encouraging some travelers to consider the friendly skies over the open road.

     “For the nation's biggest airline, American, every penny increase in the price of jet fuel adds another $28 million a year in costs,” said ABC’s Bob Jamieson, who counseled viewers of the May 7 “World News Tonight” that “analysts say recent fare increases are only the beginning, as the skyrocketing fuel prices threaten the airlines' already shaky balance sheets.”

     Yet nearly a week earlier, Knight Ridder Newspapers reporter Trebor Banstetter wrote about industry experts who found high gas prices might boost air travel, at least among shorter routes flown by discount airlines.

     Banstetter noted that although fares have gone up in the past few months, “on competitive routes, airline fares are still low enough to make motorists take a second glance.”

     Southwest Airlines, for example, “has always competed as much with the car as they have with other airlines,” Banstetter quoted Forrester Research analyst Henry Harteveldt, who foresaw “more and more demand for airline travel” as gas prices rise.

     Additionally, passengers are still booking flights, USA Today’s Dan Reed reported on April 12. While “fare increases have produced a double-digit percentage rise” in airline ticket prices and “are likely to go higher still,” Reed reported demand for air travel is still strong and becoming more financially stable.

     ABC’s focus on the higher cost of flying also played up an inconvenience to frequent fliers while neglecting the overall health of an industry which the Bureau of Labor Statistics estimates employs more than half a million workers.

     Following five years and nearly $40 billion in the red, “U.S. airlines are widely expected to be profitable in 2007, thanks to higher fares and continued aggressive cost cutting,” Reed reported.