When we were looking through Thursday’s consumer price index data, one item that jumped out at us was airfare. It’s way up — 43% higher than a year ago. But why?
This is partly a supply-and-demand story. A lot of people want to fly these days, and there aren’t as many flights as there used to be.
Which means “prices are going to go up,” said Mike Arnot at the airline data company Cirium.
Compared to the summer of 2019, “the data shows that there were 9% more passengers flying in the United States this summer, but there were 6% less seats available to buy,” Arnot added.
The reason there are fewer seats is airlines don’t have enough staff.
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“Across the board, from rampers, flight attendants, pilots and mechanics,” said Dan Akins at the consulting firm Flightpath Economics.
That’s meant airlines have had to cut flights and increase wages, he said. Plus, “fuel prices for flying aircraft are up about 60% year over year.” All of those things, he said, are contributing to higher ticket prices.
Industry analyst Bob Mann said he thinks airlines have been testing the waters to see how much they can charge.
“Offering people high prices, seeing what percentage bite,” Mann said.
Airfare has always varied a lot depending on where you’re going and when. Right now, in October, average domestic airfare is actually pretty comparable to what it was pre-pandemic, according to Hayley Berg at the travel app Hopper.
“Partly because we’re in this sweet spot,” she said. “We’re after the peak of summer travel, and we’re before travelers are really heavily booking their holiday travel.”
But in late spring and early summer, “airfare was 40%, 50%, sometimes on some routes even 60% or 70% higher than in 2019 and 2018,” Berg said.
And, she said, that’s likely to be true again during the holidays.