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US airfares on the rise, outpacing inflation

NEW YORK--Travelers, prepare to pay more for your flight.

The average roundtrip ticket within the U.S., including taxes, reached US$509.15 in the first six months of this year, up nearly US$14 from the same period last year. Domestic airfare continues to outpace inflation, rising 2.7 percent compared to the 2.1 percent gain in the Consumer Price Index.

Airfare has gone up 10.7 percent in the past five years — after adjusting for inflation — according to an Associated Press analysis of data from the Airlines Reporting Corp., which processes ticket transactions for airlines and more than 9,400 travel agencies, including websites such as Expedia and Orbitz.

The formula for rising fares seems simple, but it eluded the airlines for years: Match the supply of seats to passenger demand.

“Airlines have reduced the number of seats while more people want to fly because of the economic recovery. All this leads to higher airfares,” says Chuck Thackston, managing director of data and analytics at Airlines Reporting Corp. “This trend in airfares is likely to continue for the near future, as the economy continues to grow.”

These days, fares only capture part of the cost of flying. Many passengers pay extra to check their luggage, typically US$50 roundtrip for the first bag and US$70 for the second one. But bag fees haven't changed much in the past few years. Now, the airlines are increasingly enticing passengers to pay for fast-track security lines, early boarding, additional legroom and other extras that can add from US$9 to US$299 to the cost of a flight.

So, for example, a US$300 ticket can balloon to US$450 on some airlines if you check two bags and pay US$30 for a little more room to stretch your legs.

And travelers aren't finding much relief after landing. The average nightly price of a hotel room in the U.S. during the first half of this year was US$113.80, according travel research company STR. That's up US$4.47, or 4 percent, from the same period in 2013.

Most people are traveling for work. And when the economy is strong, they do more flying. Data released by the government last week shows that economic growth bounced back after a brutal winter, businesses are creating jobs at a steady pace and consumer spending is on the rise.

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