“Supply chain issues.”
It’s the most highly trafficked explanation for why menu items at your favorite local restaurant are now priced at a premium, no one in their right mind should buy a car right now, you might wind up waiting six months for your new couch, and — thanks to a glass shortage — you’re probably having a hard time chasing down that specific bottle of wine at present.
Couple that with the effects of inflation and it feels like you’re paying an arm and a leg for virtually everything … except, inexplicably, airfare. Mercurial by nature, the cost of airfare has remained relatively consistent over the better part of the past year in that it’s not exactly cheap, but not overly expensive either. A Google flights search to just about any destination in the world right now will show you a series of flight options, all of which are purportedly “typical” in price.
But according to a study conducted by the travel booking site Hopper, that’s about to change. Per the Consumer Airfare Index Report released last week, both domestic and international airfares are expected to rise — 7% and 5%, respectively — every month through June 2022. In short, airfare is set to surpass 2019 levels by April.
The cause for the surge in prices? Well, it boils down to just a few variables: demand, inflation and cost of jet fuel. And the cost of jet fuel is compounded by increase oil costs and, of course, demand.
“We continue to believe higher fuel costs are a medium- to long-term positive for North American airlines given the result typically reduces supply and boosts ticket prices, which we believe positively influences earnings multiples,” JPMorgan airline analyst Jamie Baker wrote earlier this month. “Though. again, clarity in this regard is more likely after the new year, in our view.”
Fortunately, these type of price fluctuations typical occur in two- to three-month intervals, so hopefully the back half of 2022 will yield more wallet-friendly flight options than the first. That said, in the meantime, experts stress the importance of booking early. Considering a trip this spring? You should be looking to secure airfare now.
“From an industry perspective, we are in a pattern where during a COVID variant we have suppressed demand, but once it wanes we see pent up demand take off,” Hopper economist Adit Damodaran told The Points Guy. “While we once viewed travel bookings as starkly either pandemic or post-pandemic, we are now seeing that bookings follow the waves of the variants. There are times where consumer confidence is high and consumers are eager to book, and other times where they are more hesitant.”
“If you are planning spring break travel, you should be tracking prices and book soon,” he added. “Spring prices will only get higher in coming weeks as the Omicron wave ends. In short, the best deals for spring break trips are out there right now. For summer travel, travelers should also be monitoring with price tracking tools like Hopper, but there is more time before you need to book.”
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