While inflation has regularly made headlines lately, with many pointing to the roughly 8% figure from the Consumer Price Index, there are still several consumer spending categories surpassing it, including the price of airline tickets. In the last year, the consumer price index for airline tickets has shot up by 25% — the largest jump since the Federal Reserve of St. Louis began tracking the index in 1989. In April alone, airfares spiked 18.6%, according to the Bureau of Labor Statistics.
Regardless of soaring prices, Americans aren’t hesitating to break out their credit cards and book a trip. A recent Bank of America Institute survey showed spending at airlines and travel agencies is up a whopping 60% year-over-year. At the same time, as Americans continue to grapple with 40-year high inflation rates and resource-strapped airlines work to get more planes in the air, traveling on a budget seems to be nearly impossible.
Since the beginning of the pandemic, many airlines have been drowning in debt and struggling to return to a state of profitability. Now, with travel restrictions easing across the world and higher operating costs to deal with (like higher jet fuel prices), airlines are salivating to serve travel-deprived consumers — and for a major profit.
As a result, ticket prices are near all-time highs at the moment. For starters, there are simply not enough seats to provide for how many people want to fly. Henry Harteveldt, travel industry analyst at Atmosphere Research Group, tells Select that while travel demand has come roaring back, seat capacity is still down 6% compared to pre-pandemic numbers. Additionally, consumers aren’t the only ones facing high gas prices at the tank — the airlines are feeling it, too. According to IATA, the price of jet fuel has increased nearly 150% in the last year. Airlines are also facing the reality of not having enough pilots and flight attendants to run their flights, as well as higher labor costs. All of these forces have combined to create rising ticket prices. Harteveldt refers to this as, “market forces at work.”
