Airlines Raise Fares From US

U.S. carriers led by United Continental Holdings Inc. are shielding their lucrative trans- Atlantic business from the worst of Europe's economic slump, after shrinking the supply of seats to support higher fares.

Summer ticket prices to western Europe have risen an average of 3 percent from 2011, according to Travelocity.com. Demand for U.S.-to-Europe trips also is holding up, with ticket sales climbing 5.9 percent to 1.31 million for the peak travel months, according to data compiled by Airlines Reporting Corp.

Flights across the Atlantic are the biggest overseas market for U.S. airlines, with traffic that can roughly double in U.S. summer months from wintertime lows, data compiled by Bloomberg show. Cutting capacity helps carriers maintain pricing power, especially with European business travel at risk from the region's economic slowdown.

"The industry is being proactive about restructuring the amount of seats that are available for sale given the European debt crisis," Dan McKenzie, an analyst at Rodman & Renshaw in New York, said in a telephone interview.

Delta Air Lines Inc., traditionally the first U.S. carrier to report operating results each month, probably will give the initial glimpse at summertime flights to Europe next week with its traffic report for June. After paring capacity, it filled 84.6 percent of seats on trans-Atlantic flights in May, up 0.9 percentage point from a year earlier, even as traffic fell.

"All indications are that Europe is holding up well, David Fintzen, an analyst at Barclays Capital in New York, said in a telephone interview. "You've seen underlying demand trends get a little bit stronger over the last couple of months."

That pattern shows up in the information from Airlines Reporting Corp., which clears transactions for flights booked on U.S. airlines. That gives the Arlington, Virginia-based company a look at future bookings instead of the backward snapshot provided by carriers.

While the number of tickets sold for each of the three summer months increased, the data also show challenges as airlines grapple with slowing economic growth. Fares for both June and July bookings declined before an August increase, Airlines Reporting Corp. data showed.

Flights from the U.S. to western Europe are averaging $1,315 for May through September, up about 3 percent from the same period in 2011, Travelocity data show.

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