Fasten Your Seat Belts -- Air Fares Are Soaring

Just in time for the summer travel season: higher air fares. Four major carriers -- Continental, American, Northwest and U.S. Airways -- announced a 4 percent hike in their standard domestic leisure rates over the Memorial Day weekend. If, as expected, other carriers follow suit, this third raise for 1999 will zoom fares to an 11 percent increase for the year. Its a function of classic demand in the midst of a booming economy, says TIME senior economic reporter Bernard Baumohl: "Airlines are experiencing record high traffic by passengers, which has been pumped up by low unemployment, consumer confidence and a rise in personal wealth." At the same time, he notes, airlines have faced increases in fuel prices.

With studies showing that 13 percent of Americans plan to travel to their vacations by air this summer -- a 3 percent increase over last year -- airlines have little incentive to discount. Still, there may be some relief before the year is out. "If past airline patterns hold true, one or two of the major carriers will eventually break with the pack and lower fares to get a competitive edge, prompting the others to follow," says Baumohl. The only question -- whose answer will probably come too late for most vacationers -- is when that will happen. So until further notice, make sure to pack your wallet along with your parasol.