The cost of airfare in the U.S. increased at about four times the rate of inflation in 2022, according to data released by the Bureau of Labor Statistics.
The data indicate that airfare went up by 28.5% during the year. The overall consumer price index increased by 6.5% in 2022.
Meanwhile, air traffic started returning to pre-pandemic levels at the nation’s airports. According to Transportation Security Administration data, more than 900 million passengers were screened at U.S. airports in 2022.
AAA Senior Vice President of Travel Paula Twidale said the combination of increased demand, higher jet fuel costs, inflation and fewer airline staff all combined to make airfare more expensive. She said many airlines have cut the number of flights and given incentives to pilots and airline employees to retire. Given that airlines use dynamic pricing for flights, running fewer routes make things more expensive for passengers.
“Travel is back up, people are going and they want to get out,” she said. “Bookings are coming in steadily, but you’ll see a lot more increases. We saw a greater increase from 2022. We will see some price increases, probably not as dramatic, but not going down.”
“Airlines are probably just as happy going out full at a higher price point because they’re not losing money on that,” she added. “They might put more flights out, and the price will be cheaper for you and me, but they’re not going to make as much on the margin.”
Those price increases have been especially pronounced for international flyers. International travel demand had a more delayed comeback compared to domestic due to COVID-19 restrictions.
Her advice for travelers is if you “see a deal, get it.” Twidale said she is flying to Europe in June and already opted to purchase her tickets. Given that supply of seats is limited, she suggests waiting to purchase tickets could be risky. Twidale said flights for the summer are already starting to sell out.
She said from her decades of experience, her advice remains not to wait.
“Don’t wait thinking you’re going to get a better deal,” she said. “I booked seven, eight months ahead of time. I never would have done that before. I wouldn’t book a month before, but I wouldn’t book eight or nine months before either, especially if the prices are high.”
In some cases, staffing, computer glitches, and other issues have caused massive air travel disruptions. Whether these costs get passed to the consumer remains to be seen.
But if demand remains high, airlines have little incentive to drop prices.
“Right now, people are paying,” Twidale said. “I live in South Florida. Places are packed. Restaurants are packed. Prices are up but people are still paying. They say recession, at some point, a tipping point will happen. But for the people with money, they’re still paying.”
