THE START OF NEW TREND OR A MERE BLIP? ANALYSTS ARE SPLIT.
Airfares rose for the first time
in almost 2 years in December
By Robert Silk
December brought the first year-
over-year bump in domestic
monthly airline ticket prices in al-
most two years.
Analysts, however, remained divided last
week over whether the increase will be the
start of a new trend driven by higher fuel
and labor costs or merely a blip.
“Things may change with a new ad-
ministration and new labor agreements,”
said Chuck Thackston, managing director
of enterprise information for ARC. “Hard
to predict how those will impact average
ticket prices, but demand continues to be
strong, and competition is good, so it is re-
ally a good time to be traveling by air.”
Airfares rose 1.9% in December, accord-
ing to data released Jan. 18 by the Bureau
of Labor Statistics. That figure closely par-
allels data provided by ARC last week that
showed that domestic airfares increased by
2% year over year in December, the first
such jump since March 2015.
The cost of a domestic roundtrip ticket
averaged $470 last month, up from $460 a
year earlier. The data incorporates tickets
bought in all fare classes.
December’s increase was a sharp change
of direction for domestic ticket prices,
which until then had dropped on a year-over-year basis by at least 2.7% in each
month of 2016. The trend peaked in April
and May, when prices were lower than in
2015 by 7.9% and 8%, respectively.
For the year, ticket prices were down
more than 4%, Thackston said, following a
drop of slightly more than 3% in 2015.
Sales of travel insurance policies saw
growth in 2016 as dangers increased
By Jamie Biesiada
Bad news is often good news for the travel
insurance industry, and since 2016 produced
plenty of negative headlines about terrorism
and other world events that consumers could
not ignore, the insurance sector saw another
12 months of solid growth least year.
But in addition to heightened consumer
awareness of dangers, sales were boosted by
the increasing value of the policies themselves in terms of both coverage and streamlining the claim-filing process.
“In general, there is increased awareness
and purchase of travel insurance by Ameri-
can travelers and a growing awareness of
potential travel disrupters, leading to an in-
crease in the number of people buying travel
protection products,” said Megan Freedman,
executive director of the U.S. Travel Insur-
Insurers reported year-over-year increases
in 2016. For example, travel insurance comparison site Squaremouth said that 18%
more travelers were insured in 2016 compared with the year prior. Allianz Global Assistance, meanwhile, reported a 15% growth
in sales of travel insurance.
Though he declined to release specific figures, Isaac Cymrot, vice president of industry
relations at Travel Insured International, said
his company realized sales growth in 2016,
despite a slow first quarter.
“Most agents didn’t have the first quarter
they wanted to have, which had an impact on
See INSURANCE on Page 54
See FARES on Page 52
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