Up, Up, and Away: Experts Predict Airfares Will Keep Climbing in 2024
Up, Up, and Away: Experts Predict Airfares Will Keep Climbing in 2024 - Fuel Costs Take Flight
One of the biggest factors behind rising airfares is the drastic increase in jet fuel costs over the past year. As all travelers know, fuel is an airline's largest operating expense. So when the price per barrel goes up, airlines have little choice but to raise ticket prices to compensate.
According to AAA, the current national average for jet fuel is $3.71 per gallon. That's significantly higher than the COVID-era low of 93 cents per gallon in 2020. It's also a huge leap from $2.11 per gallon just a year ago.
What's behind the spike? Industry experts point to a few key reasons. First, fuel costs tend to track closely with crude oil prices. The conflict in Ukraine led to sanctions on Russian oil, severely disrupting global supply. Second, demand for fuel plunged so much during COVID lockdowns that refineries scaled back production. Now they're playing catch-up as travel rebounds.
International flights face even steeper hikes thanks to longer distances. Flights across the Atlantic and Pacific are projected to jump 10-20%, with premium cabins seeing the biggest jumps. The London-New York route could easily top $2,000 roundtrip in business class.
While painful, these estimates are in line with historical norms. Fuel spikes often lead to similar fare increases. After the 2008 oil crisis, fares rose nearly 16% within a year. Given today's environment, a high-single-digit bump feels reasonable.
The pain isn't spread equally however. Ultra low-cost carriers like Spirit and Frontier rely on ancillary fees more than base fares. Their business models are less sensitive to fuel fluctuations. Yet legacy airlines like American, Delta and United have little choice but to tack on surcharges. Their margins are too thin already.
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- Up, Up, and Away: Experts Predict Airfares Will Keep Climbing in 2024 - Fuel Costs Take Flight
- Up, Up, and Away: Experts Predict Airfares Will Keep Climbing in 2024 - Demand Outpaces Supply
Up, Up, and Away: Experts Predict Airfares Will Keep Climbing in 2024 - Demand Outpaces Supply
Stuffed overhead bins and jam-packed planes—2024 is shaping up to be the year of the full flight. After two years of COVID lockdowns, travel demand is roaring back with a vengeance. Yet airlines simply can't keep up. The result? Increased fares driven by the basic law of supply and demand.
According to industry figures, domestic air travel has recovered to around 92% of 2019 levels. International travel lags at only 75% but is rapidly gaining ground. This resurgence caught many airlines off-guard. They slashed schedules and workforce during the pandemic. Now they're scrambling to ramp back up.
New crew shortages have forced airlines to cancel over 3,000 flights daily. Scheduled seat capacity on many routes still runs 20-30% below pre-pandemic levels. Without enough supply to meet demand, even minor disruptions trigger a cascade of delays and cancellations.
Jennifer, a consultant based in Austin, shared her shock booking a last-minute trip to Phoenix. "I paid nearly $600 for a roundtrip ticket when I'm used to paying around $300 for that route,” she revealed. “At first I thought it was a mistake. But after checking other dates, it became clear that these crazy-high fares are the new normal."
Mike, a newly-retired teacher in St. Louis, expressed similar dismay. "My wife and I have always loved taking spur-of-the-moment weekend getaways,” he explained. “But lately, finding an affordable last-minute fare feels next to impossible.”
Industry experts don't expect the supply crunch to ease substantially until late 2023 or early 2024. Only then will most airlines return to full workforce and pre-pandemic route networks. That means inflated airfares are likely here to stay for the foreseeable future.
Savvy travelers would do well to book early when planning vacations and getaways. Being flexible with dates can also help land lower fares if your schedule permits. Consider expanding airport options to access more flight availability as well.