Business

U.S. airfares seen staying high as fuel savings flow to holders

DALLAS -- Airline investors are poised to reap big benefits from falling fuel bills that helped the U.S. industry rack up record profits last year. Consumers, not so much.

Fliers might hope to see some relief in the form of lower ticket prices, but airlines will probably use the windfall to reward shareholders first while demand for travel remains high and planes are flying with record numbers of seats sold.

There's "no reason" to trim prices in that environment, said Fred Lowrance, an Avondale Partners analyst in Nashville, Tennessee.

Domestic travelers are confronting fares that, at the end of the second quarter, were the highest they'd been in 11 years according to the U.S. Bureau of Transportation Statistics. Airline profits meanwhile are forecast to have risen 65 percent in the fourth quarter to $2.72 billion, according to analyst estimates.

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