DAVID GREENE, HOST:
Forty percent of Americans are expected to travel this Thanksgiving holiday. We're seeing lower gas prices right now, and so people hitting the road will get a break. Now, if you're flying though, in theory, you might expect airlines to pass on their savings in the form of lower airfares. But think again.
Here's Kaomi Goetz, from member station WSHU.
UNIDENTIFIED WOMAN: Bye-bye.
KAOMI GOETZ, BYLINE: Just like every year, Tom Lekowski, of Charlotte, N.C., will fly to Boston to see his family for Thanksgiving. His ticket price seemed routine, too.
TOM LEKOWSKI: Three seventy-five. As I recall, it's about the same as it was last year.
GOETZ: He's one of 25 million passengers expected to fly during the holiday period. Airlines believe they'll see a slight increase over last year. Some analysts are predicting a dip. In any case, Lekowski says cost wasn't a factor.
LEKOWSKI: Well, if it's a thousand dollars, maybe that might have made some effect, but likely not. Got to go see family once or twice a year.
GOETZ: The nation's airlines are counting on the tug of those family heartstrings. High travel demand around the holidays traditionally provides the companies with a much-needed, year-end revenue boost. And this year is no different.
JOHN HEIMLICH: The airlines continue to emerge from a large financial hole on their way to modest profitability.
GOETZ: John Heimlich is the chief economist for the trade group Airlines for America. He says the nation's 10 largest carriers will see their collective profits rise by $4.5 billion this year. That's a welcome improvement over 2012, when profits were flat. Airlines have struggled in recent years because of relatively low travel demand and high jet fuel prices.
Heimlich says more than a third of airline costs are tied to fuel prices. Even though they have fallen some, airlines are still recovering from the price spikes that hit between 2010 and last winter.
HEIMLICH: In the first nine months of 2013, they generated a modest 4.0 percent profit margin.
GOETZ: The need for bigger profits is why airlines have resorted to charging passengers for former freebies, such as checked baggage, better seats - even for snacks. Besides piling on fees, the airlines are trying to pack more people into fewer planes. On the busiest travel days, planes will be more than 85 percent full. And the carriers are nudging up fares. Travel agents say this year's Thanksgiving fares are up by about 3 to 7 percent from last year.
Courtney Scott is a senior editor at online travel agency Travelocity. She says airlines have more pricing power this year.
COURTNEY SCOTT: That's largely attributed to airlines not adding very many seats into the air and the high demand and many people clamoring for seats at the holidays.
GOETZ: Airlines insist the average ticket price of $415 is actually a price decrease when adjusted for inflation.
While airlines and passengers may be quibbling over the real cost of air travel, drivers can be sure they'll be getting a bargain, at least compared with last Thanksgiving. In recent months, gasoline prices have been tumbling, down to the lowest levels in nearly three years. A gallon of gas is even below $3 in some states.
The lack of hurricanes in the Gulf of Mexico helped create healthy supplies of gasoline this fall. That could translate into a nice price surprise at the pump.
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GOETZ: Jeff Kauffman fills up his tank at a gas station in Stamford, Connecticut. Regular unleaded is now $3.63 a gallon.
JEFF KAUFFMAN: I think they seem lower than they have been in a while.
GOETZ: Last summer, he paid $4 a gallon. With the economy still struggling, AAA, the auto club, expects slightly fewer cars on the road this year. But Kauffman believes the recent gas price drop might encourage people to make last-minute trips, adding to congestion.
KAUFFMAN: It sucks. It's awful.
KAUFFMAN: It's always awful.
GOETZ: But Kauffman has a plan. He and his family will leave in the middle of the night, arriving just in time for turkey in Maryland.
For NPR News, I'm Kaomi Goetz.
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