Rising fares, low-cost airlines: navigating the new reality in the sky
Leisure travel is back after the Omicron wave, with travel off only about 8% last weekend compared to the same period in 2019, according to the TSA’s checkpoint numbers. As travelers make their plans for upcoming spring and summer travel, they can expect to see airfares inching up — pushed by seasonal demand, inflation and oil price spikes — while new routes are expanding as both American and foreign airlines aim to encourage a return to international travel. The rush to travel has inspired innovation in the skies at the same time as the airline industry encounters new headwinds with the war in Ukraine. Story features how developments in the air may affect trips. One sign of travel’s recovery is higher airfares, as airlines are able to charge more to growing numbers of willing fliers. According to the Consumer Price Index, airfares were up more than 12% in February compared to the same period in 2021, when Covid-19 vaccines were just being introduced. At this point, those fares are more a reflection of competition for seats than the rising price of jet fuel since Russia’s invasion of Ukraine. On Feb. 24, jet fuel was $2.71 a gallon, according to the Argus U.S. Jet Fuel Index, peaking around $4.11 in early March. It is currently around $4. Fuel accounts for about 30% of an airline’s operating cost, said Adit Damodaran, the economist at the flight-booking app Hopper, adding that a 10% rise in jet fuel normally triggers about a 3% increase in expenses, which are generally passed on in higher airfares. According to Hopper searches, the average domestic airfare is $330, about 7% above 2019 prices. Story has more.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2022-03-28/general/rising-fares-low-cost-airlines-navigating-the-new-reality-in-the-sky
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Rising fares, low-cost airlines: navigating the new reality in the sky
Leisure travel is back after the Omicron wave, with travel off only about 8% last weekend compared to the same period in 2019, according to the TSA’s checkpoint numbers. As travelers make their plans for upcoming spring and summer travel, they can expect to see airfares inching up — pushed by seasonal demand, inflation and oil price spikes — while new routes are expanding as both American and foreign airlines aim to encourage a return to international travel. The rush to travel has inspired innovation in the skies at the same time as the airline industry encounters new headwinds with the war in Ukraine. Story features how developments in the air may affect trips. One sign of travel’s recovery is higher airfares, as airlines are able to charge more to growing numbers of willing fliers. According to the Consumer Price Index, airfares were up more than 12% in February compared to the same period in 2021, when Covid-19 vaccines were just being introduced. At this point, those fares are more a reflection of competition for seats than the rising price of jet fuel since Russia’s invasion of Ukraine. On Feb. 24, jet fuel was $2.71 a gallon, according to the Argus U.S. Jet Fuel Index, peaking around $4.11 in early March. It is currently around $4. Fuel accounts for about 30% of an airline’s operating cost, said Adit Damodaran, the economist at the flight-booking app Hopper, adding that a 10% rise in jet fuel normally triggers about a 3% increase in expenses, which are generally passed on in higher airfares. According to Hopper searches, the average domestic airfare is $330, about 7% above 2019 prices. Story has more.<br/>
