Airfares Expected to Increase Only Slightly in 1999

<B> Airfares Expected to Increase Only Slightly in 1999</B>

By Jay Campbell

Travel industry analysts are recommending to corporate travel managers that moderate business airfare increases are in order for 1999, following what appears to have been a peak in fare increases last fall.

Although there are some wild cards, particularly fuel prices, most observers are suggesting that the airlines' several failed attempts to raise fares in 1998 are a reflection of the prospect that additional capacity (from both new aircraft deliveries and shifting services away from Asia) will overrun weaker--though still strong--traffic growth.

Predictions of increases in the 2 to 5 percent range were most common. Although far lower than the year-over-year increases in 1996 and 1997, such percentages top those seen so far in 1998 (<I>BTN,</I> July 20).