Airlines are slowly clawing their way back to profitability, or at least sustainability, thanks to some clever revenue generation and the return of valued business travelers. Knowing all too well how volatile the industry is to market changes, carriers are keeping their planes full and turning over every revenue-generating stone they can find, including bumping up airfares ever so slightly. Did you notice?

Airlines typically don't raise fares dramatically, especially if other competitors refuse to follow along. So, they look to other ways of cashing in. One lesson we may have inadvertently taught the airlines is that we'll gripe about price increases, especially with fees, but we'll still pay them. Despite the unpopularity of checked-baggage fees, they are among the highest revenue generators for airlines these days and this has seemingly given them the green light to experiment with other fees. But these ancillary charges are only part of the story.

Southwest Airlines is among the most recent airlines to report positive earnings in the last financial quarter. The airline claims that part of its success is the "bags fly free" campaign and almost-fee-free travel experience of its customers. What is probably also at play is the fact that for the first three months of 2010, the U.S. Department of Transportation (DOT) reported a 4.7% average increase in domestic air fares over last year. All indications are that the subsequent months leading up to and through this summer will probably show higher fares than in 2009. For those of you thinking this might have everything to do with fees, they don't. The figures do not include ancillary revenue from baggage fees or other charges.

From Singapore to France and beyond, airlines are returning to profitability. The continued airline passenger growth in regions like Asia; the restraint that airlines have shown in keeping their capacity (available seats) lower than in the past; and the addition of new sources of revenue all have played a part in the recent good news. So have fares gone up significantly? Back in April, European airfares were expected to increase over 5% due to rising oil prices and the aftermath of the volcanic ash disruptions. Increased competition within the European continent may be keeping fare increases at bay, but if you've booked a trans-Atlantic flight recently, you may have noticed an upward tick in the price over last year's prices.

In the U.S., the DOT reports that the US$328 first-quarter 2010 average fares were down 8.3% from the all-time high, not inflation-adjusted, of $358 in the third quarter of 2008. Adjusted for inflation, first-quarter 2010 fares were down 25% compared to fares in 1999.

Since U.S. airlines were deregulated in 1978, fares have indeed remained comparatively low. Here is a nostalgic eye-opener. Below is an advertisement from Eastern Air Lines, one of the largest airlines in the U.S. until its demise in 1991. It is from 1977 and it advertises the "unlimited mileage" fare. In today's U.S. dollars, the advertised fare would start at over $900. If you think about it, would $900 be a deal today if you were allowed to fly between any numbers of cities for up to 21 days? Some of you may recall JetBlue's $599 pre-paid fare that allowed buyers unlimited travel on JetBlue for a month. Being a low-cost carrier, JetBlue is very different from what Eastern was back then – a much larger, full service airline in the tradition of the older, legacy carriers. Still, what would you think of such an offer either today or back then? What a difference 33 years makes! Or does it?