This is why summer time flights appear so costly this yr

Fares are higher and demand is surging

For myriad reasons, airlines are simply charging more for flights this summer than they have in the past.

Data provided by the Airlines Reporting Corporation, a travel intelligence firm and ticket processor, shows that fares have largely risen across the board for flights this summer compared to both 2022 and 2019, the last full year before the pandemic.

The average price of fares for the top 10 summer travel destinations was 9% to 37% higher than in 2022, according to ARC’s data.

Prices increased even more compared to 2019, with average fares for each destination climbing between 23% and 54%.

The data reflects tickets sold in the U.S. and processed through ARC’s systems between Jan. 1 and April 6, 2023, for travel during the summer season — between Memorial Day and Labor Day.

Demand is higher than it has been since the pandemic began. Even as airline capacity broadly remains slightly below 2019 levels, a supply-and-demand mismatch is driving prices sky-high. In fact, the U.S. Travel Association, an industry trade group, says domestic leisure demand has surpassed pre-pandemic levels.

ARC’s chief commercial officer Steve Solomon told TPG that the supply-and-demand asymmetry is the main driver of high prices.

“Increased demand is partly driving more expensive airfare as we’re seeing ticket transactions for the top summer destinations up year over year,” Solomon said. “Demand, coupled with other factors including increased labor costs, jet fuel up around 40% year over year, and not every airline operating at 2019 capacity levels, all contribute to higher prices paid by travelers.”

People are booking their vacation flights earlier

Alongside the increase in demand is a return to a pre-pandemic norm — leisure travelers are making their plans further in advance.

During the first two post-vaccine summers, travelers tended to finalize their plans only at the last minute. Uncertainty surrounding case outbreaks, personal illness or infection, travel restrictions and more made consumers wary about committing early. This was particularly true if reservations were nonrefundable or could only be canceled in exchange for a credit.

Plus, business travel was still significantly down. With business travelers more inclined to book close-in flights and typically less sensitive to prices than vacationers, airlines raised fares as departure dates moved closer. With the leisure booking curve shortening, those last-minute prices tended to look more palatable.

Now, airlines are seeing that leisure booking curve elongating again. Coupled with the high demand, that has made for some intense booking cycles.

Looking ahead and planning your summer vacation

Still, there may be good news ahead, according to Hayley Berg, lead economist at flight-booking service Hopper — but it depends on where you want to go.

Fares for domestic flights in July have decreased slightly in recent weeks, Berg said. She noted a pattern that seems “typical of normal summer pricing, which starts high in late winter and early spring, drops in April/May before rising in the last month or so ahead of departure dates.”

While overall average domestic fares for June and July are roughly 7% below 2022 levels, they remain 16% higher than they were at the same time in 2019. Berg said that she expects those prices to remain steady before spiking two to three weeks before departure.

However, if you’re looking to pay lower fares to fly abroad, you may be out of luck, Berg said.

“International airfare remains significantly higher than pre-pandemic given low supply of seats, high demand and overall higher costs, including high jet fuel prices,” Berg said. A report by Hopper forecast airfare to Europe over the next six months to be 24% higher than pre-pandemic, on average. Fares to Asia are expected to surge around 60%.

Even so, there are still sporadic deals, according to Katy Nastro, a travel expert at flight-deals subscription service Going.com.

“Airfare is volatile, and so prices you see today don’t necessarily reflect what you see tomorrow,” Nastro said. Even as prices climb on a particular flight or deal, “that doesn’t mean the flight won’t drop again — as we know airfare isn’t static — but the likelihood of it dropping majorly … is less.”