Southwest Airlines will resume two nonstop flights from Birmingham-Shuttlesworth International Airport (BHM) in September.
Planning on catching a flight to your vacation destination? You may be in for a shock.
Air fares are up significantly, just as travelers are licking their chops to set out for vacation haunts, inspired by two years worth of vacation fantasies while stuck indoors during the pandemic.
Travel app Hopper says domestic flights are up 40% from the beginning of the year. And according to the Adobe Digital Economy Index, online spending for airline tickets in March was up 28% from pre-pandemic 2019 levels, while actual bookings increased only 12%. The picture grows clearer on a month-over-month comparison. Online spending in March 2022 was up 32% from February, while bookings increased only 15%.
Over the first four months of this year, Americans spent $21 billion on domestic airfare, though they spent $56 billion total in all of last year. Clearly, millions are ready to leave home as COVID-19 restrictions fall at home and abroad.
But two factors are driving the ticket increases – fuel prices and flight demand. As everyone knows, the price of petroleum has rocketed upward since the start of the Russian invasion of Ukraine. As a result, oil prices have been trading at highs not seen in nearly 14 years, and are expected to remain volatile.
According to Business Insider, the price of jet fuel is the second-biggest expense for airlines behind labor.
But another reason is demand. Mona Simmons is the owner of What’s Next Vacations in Hoover, and has been booking travel for the past seven years. Last year was her best year of business, but she has already surpassed her 2021 totals, five months in 2022. Though she rarely does stand-alone air travel, she has had clients beg off taking a plane to Florida to hook up with their Caribbean cruises, opting to save a little money by driving.
“You’ve got pent-up demand of two years, and people are feeling confident enough in their vaccine status or the condition of the world to be venturing out again,” she said.
Simmons said she began noticing air fare spikes when she considering booking flights to resort destinations but decided otherwise after looking at the prices. The effect isn’t necessarily being felt in international flights. Simmons said she found a flight to one city overseas was half the cost of a domestic flight to San Francisco.
And CNBC Select reported that higher ticket prices are not frustrating demand, even though seat capacity is still down 6% when compared to flights before the pandemic. Fewer flights, higher fuel prices and high demand add up to increased ticket prices.
But Simmons added one more note of caution – unpredictability.
“I have clients going to Alaska in June, and I think I’ve gotten six flight changes for them,” she said. “It’s a constant, every time I open my email. Whose flight is changing today? It’s a little nervy when you can’t count on flights.”
Forbes reports that most U.S. airlines are limiting their summer capacity due to labor shortages and other factors, in addition to thinning their summer flight schedules to firm up operations.
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