Airlines Are Doing Better

Higher Fares, More Crowding in the Cards for Business Travelers

For the fifth month in a row, U.S. airlines reported year-over-year revenue growth, according to data taken from a sample group of domestic carriers by the Air Transport Association of America.

The upward trend began in January with a 1.4 percent improvement and has since escalated to a 21 percent increase in May. The five-month rise follows a 14-month skid that culminated in an 18 percent decline in December 2009 over the previous year, the largest drop on record.

Along with positive revenue growth, cost per mile rose 17 percent in May over the previous year, according to ATA. That statistic dovetails with recent data reported by the American Express' Business Travel Monitor, which found domestic and international fares for corporate travelers were up 6 and 3 percent, respectively, for the first quarter of 2010 over the same period a year ago.

"As business travel starts to pick back up, airlines can slow the expansion of capacity in order to gain more pricing leverage," said Christa Manning, who directed the research for the American Express report.

Already, load factors -- the measure of how full flights are -- were at record highs for the month of April, according to the latest figures from the U.S. Department of Transportation: 81.6 percent systemwide, 82.5 percent for domestic flights and 79.3 percent for international flights.

More crowded planes could be contributing to the slight rise in premium-class travel, where bookings accounted for 41 percent of total passengers, up 2 percent from last year.