According to recent news reports, flight prices have reached a record high – 33.3% above last year’s highs. This is the largest increase in one year and coincides with the summer travel season, when demand for air travel is typically the highest. While higher jet fuel costs are a contributing factor, understanding has also contributed to higher prices. Meanwhile, airlines have cut summer schedules to deal with this rising demand.
The demand for travel is “strongest” it has seen in 30 years
Booking sites in the U.S. have seen a spike in demand for both spring and summer travel. As the country emerges from a COVID-19 pandemic, consumers appear to be ready to fly. Airlines like Delta Air Lines are reporting their highest booking volumes ever. United Airlines CEO Scott Kirby has said travel demand is the “strongest” it has been in over 30 years.
The increase in international travel is driving demand for airfares. American Airlines reported that travel across the Atlantic and to South America was up 60 percent in March, with premium seats making up for a decline in international corporate travel. Meanwhile, travel to Asia is still lagging due to health restrictions. However, the airline industry is optimistic about 2022. Expedia’s analysts are projecting that demand for summer travel will hit “strongest” levels in 30 years.
Higher jet fuel costs are to blame
As the holiday travel season draws closer, the airline industry has been preparing for a spike in flight prices. The reason for the hike is not entirely clear. It’s likely that the higher fuel costs will be passed along to passengers. Higher jet fuel costs tend to increase with higher demand. And because jet fuel costs are made from oil, any increase will likely be passed on to passengers. That means record-high flight prices for everyone.
The oil rally is taking jet fuel with it. The Russian invasion, for example, has impacted oil prices, which are largely a reflection of rising demand. In addition, the arctic blast that hit the U.S. has disrupted oil production, refining, and transportation. Millions of Texans were left without heat, which is especially problematic for airlines that rely heavily on natural gas.
Understaffing is a factor
A lack of staff is a factor in flight prices, which have reached unprecedented heights over the past year. Many airlines have been dealing with the Covid-19 pandemic, pilot shortages, and regular service interruptions. A recent survey found that flight prices rose 33.3% year-over-year in April, the highest increase since December 1980. This increase coincides with high inflation and peak travel season in the US. And if you’re traveling this summer, these price increases could prove to be costly.
In a recent survey, over half of U.S. travelers expected higher airfares in the next six months. The shortage has led airlines to scramble to adjust their summer schedules. Despite this shortage, Southwest Airlines and American Airlines have added flights to popular summer destinations to make up for the shortfall. In the meantime, some airlines have been forced to cut flights, which has pushed up airfares.
Airlines are reducing summer schedules
As flight prices rise, airlines are adjusting their summer schedules to accommodate the increased demand. Some airlines have cut flights by as much as 16%, but others are increasing hiring plans. While consumer spending remains strong, airlines are adjusting to labor shortages and supply chain issues. Last week, Southwest Airlines said it would recall employees on voluntary pandemic leave, and that it would increase hiring plans. There are already severe shortages of flight instructors and pilots and a delay in training new workers.
A shortage of pilots has pushed airfares higher. Meanwhile, airlines are struggling to add back flights quickly enough to keep up with demand. With flight prices up, airlines are reducing summer schedules to reduce their costs and accommodate the increased demand. As a result, fewer flights will be available for travelers. However, this doesn’t mean airlines are canceling flights. It’s better to reduce flight schedules and save money than getting stuck with a high flight bill and no way to get anywhere.