Many passengers found this year’s search for affordable airfares to be challenging. Experts expect the trend to continue in 2023.
Airlines attribute the increase in ticket pricing to some issues. Some of them include high fuel costs, inflation, and a shortage of consumer-accessible seats. Additionally, airline management has no choice except to dramatically increase costs because of a lack of employees, constrained flight schedules, and delays. Despite this, many still buy tickets without hesitating.
“Holiday flights are going to be expensive once again. This is because the pricing power has shifted back to the airlines for winter holiday travel,” said Scott Keyes, the founder of Scott’s Cheap Flights.
Last May, Hopper, a company that tracks airfares, saw a significant increase in domestic prices. Costs rose more rapidly than they did last year, though. Hopper stated that average airfares increased by 19% to $274 compared to last year’s rates. In addition, domestic roundtrips increased by 40% this year to $390.
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Windfalls led to increased airfares
Although the country’s inflation worsens, the three largest US airlines—Delta, American, and United—remain lucrative. During the third quarter of 2022, they reported sales and high profits. Analysts in the market anticipate that as the Holiday season approaches, the airlines will maintain their streak. And despite no decrease in airfares, this tendency continues.
Experts claim that airlines are now maximizing their revenue streak because of the enormous losses they sustained during the Covid pandemic. Due to the worldwide lockdowns, airline firms experienced a historic loss, forcing several to declare bankruptcy or temporarily cease operations. Additionally, many airline employees left their employment since the industry could no longer afford to cover operating expenses.
“With hybrid work, every weekend could be a holiday weekend. That’s why September, a normally off-peak month, was the third strongest month in our history,” added the CEO of Unites, Scott Kirby.
“If you go look at our Thanksgiving schedule right now, there’s less peak-to-trough variability there than certainly, I’ve seen in the schedule for a number of years,” said Vasu Raja, the chief commercial officer of American.
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A few available seats
One of the top US airline providers, Delta, claimed that it still needs to be fixed at its maximum 2019 capacity. Over 95% to 100% of America’s seating capacity is expected to be restored by the following year. The three major airlines said they would reduce the number of seats on their aircraft by up to 10% during the fourth quarter. And it’s because of this that airfares rose.
“It shows you customers want to treat themselves. I think that’s a phenomenon that continues not just now. But also if there is any type of stagnation in the economy as well,” said Robert Isom, the CEO of American.
Need to book earlier
Keyes, the owner of Scott’s Cheap Flights, recommended customers make their reservations early to avoid excessive prices and completely booked flights during the holiday rush.
“When you are opening your Christmas presents, ideally, that’s when you should be thinking about booking those summer flights,” he said.
“You can make your plans in pencil rather than in pen. Last-minute fares tend to move in one direction, and it’s not down,” Keyes added.
Photo Credit: Mario Tama
Source: CNBC
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