Airline ticket prices are going up — but demand isn’t slowing down
Airline ticket prices are going up — but demand isn’t slowing down
The latest barrier to recovery from the pandemic for the airline industry is how expensive it’s gotten to fuel up the fleets.
A few things are driving up the price of plane tickets: Demand is strong, labor is in short supply and jet fuel has gotten a lot more expensive.
“Right now, prices are up more than 50% versus where they were at the beginning of the year,” said Hayley Berg, an economist with the travel app Hopper.
Those costs are getting passed on to customers, she said. But demand isn’t slowing down. “We actually have seen just continued, flowing bookings.”
That tracks with what Helane Becker has seen. She follows the airline industry at Cowen.
“There’s so much pent-up demand from people who have been fearful of traveling,” Becker said. “A lot of people who haven’t been on vacation or visited family in two years are willing to pay top dollar.”
“We’re not so worried about demand destruction,” Becker added. Not for the summer season, anyway.
If inflation keeps up and airfare stays expensive, Becker said folks might reconsider their fall travel plans.
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