Airline ticket prices up or down in 2008?

Growing 2008 oil prices are causing airlines to increase airfares even though the demand for oil is decreasing. United Airlines, American Airlines and Delta Air Lines moved to increase ticket prices by as much as $20 last week to help fight the latest increase in the jet fuel.

The jump in airfare prices is the first increase by the major airlines in 2008 but follows over a dozen 2007 airfare increases. Once one popular airline increases their dirt cheap airline tickets, others often follow.

The airfare price hikes demonstrate the growing effects of costly oil. The commodity’s rally has increased transportation and travel costs and caused companies all over the market place to hike prices.

2008 could make for more challenges to increase traffic. The airline industry’s international trade group spoke Friday of a challengingg 12 months ahead.

“We go into 2008 with a warning bell,” said Director General Giovanni Bisignani of the International Air Transport Association. ”

Customer demand growth is expected to fall to 5.0%.” Through November, passenger demand was up 7.5% in 2007.

Worry over higher fuel costs and low traffic weighed on the rest of the air travel sector.

American Airlines