Airfare Inflation Ahead of the Holiday Season
Both international and domestic passengers have been complaining about the rise in flight ticket prices as airlines have been warning them about the expected inflation in the airline industry ahead of this year’s holiday season. The holiday season has always been a busy time for travelers and now more than ever as the world is bouncing back from the pandemic. In the past two years, health concerns due to COVID-19 caused many people to delay their leisure trips. According to a report published by PricewaterhouseCoopers (PwC), about 47% of the consumers plan to travel this holiday season, and 46% of those travelers plan to fly, a rise from 40% in 2021 and 33% in 2020. Demand is high even though flight prices are at an all-time high.
According to data published in North America’s most downloaded travel booking app Hopper’s 2022 Travel Outlook report, there is a 43% and 41% price rise in domestic and international fares, respectively, for Thanksgiving, while there is a 39% and 62.5% price rise in domestic and international fares, respectively, for the week of Christmas and Hanukkah.
What causes the rise in average prices? High demand is not the only cause of the price rise of airfare traveling this holiday season. A combination of high fuel prices and fewer seats also play a significant role. According to the data published by the International Air Transport Association, the price for a barrel of jet fuel doubled from the beginning of 2022 until mid-summer. The effect of increased spending on fuel by airlines reflects itself on consumers. Besides, there are fewer available seats, caused by the pilot shortage and increased delays, leading to competition. It is reported that capacity at major airlines, Delta, American Airlines, etc., in the U.S. decreased by 6% this winter, compared to capacity in 2019.
It is worth noting that the overall rise in travel costs and hotel prices are part of the travel concerns as well, causing people to delay or shorten their trip. Analysts recommend passengers book their tickets as soon as possible, use various apps or websites available to track the best
deals, and use credit cards to have the best access to flight miles and travel insurance options.
Sources:
Millennials dominate spending amid uncertain economic outlook
How Many Americans Are Traveling This Holiday Season — and How Much They're Spending
Increased fuel prices affecting airline ticket prices
Higher airfares, fewer flights greet holiday travelers after COVID-19 worries ease