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Why Are Flights So Expensive Right Now? 8 Factors to Know

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If you’ve been searching for air travel recently, you’ve probably encountered less-than-favorable prices. Despite your best efforts, the lower fares seem hard to come by. No matter how flexible you are on travel dates and destinations, those once seemingly endless deals seem sparse.

So, why are flights so expensive right now? In the end, it’s not that complicated. Many considerations go into ticket prices, and in my never-ending quest to find cheap flight deals, I have learned much about them.

I’ll go through various situations that affect air travel’s final price here. I’ll also touch on how I use some tricks and tools to get cheap flights, like Skyscanner and Going (Formerly Scott’s Cheap Flights).

Why Are Flights So Expensive Right Now?

1. Higher Demand Leads to Fewer Cheap Flights

Delta  Plane

First, remember that flight prices are subject to the same laws of supply and demand as any other product. When there’s high demand and more people want to fly, airlines know they can charge higher prices. When the opposite occurs, and fewer travelers are looking for tickets, airlines have to lower prices to sell more.

Many factors influence travel demand, which plays a part in determining the average flight fares. These include:

  • travel restrictions arising from the pandemic
  • adverse weather
  • different seasons
  • natural disasters
  • large-scale events

The thing is, you can still find low airfare prices even when there’s high demand. You must be ready to purchase your tickets when the flight schedules are released or purchase your tickets swiftly. We use Going.com and are still finding incredible flight deals for domestic and international flights.

Demand Fell During the Pandemic

You surely recall that the pandemic caused a major roadblock for the travel industry for quite some time. Fewer people were looking for airline tickets in 2020-2021. Travel restrictions were once rife from lockdowns and closures due to the pandemic. Moreover, even as travel restrictions eased, some felt uneasy or unsafe to travel while the world recovered from the pandemic.

As the situation improved and borders opened up, the pendulum swung in the opposite direction. 

As countries worldwide began climbing out of restrictions, demand skyrocketed from pent-up demand. As a result, low fares got harder to come by. While costs saw a spike from the pent-up demand, it’s estimated things will settle to more reasonable numbers in the second half of 2023.

Seasonality Affects Demand

Pandemics aside, demand goes up and down based on many other factors standard in the travel industry, such as the season.

Traveling anywhere in the weeks surrounding Christmas or school summer vacation always costs substantially more than their off-season counterparts. Don’t forget to consider the seasonality at your destination, which might not specifically apply to you.

For example, suppose you can only get time off work in March to fly to Japan to visit Disneyland Tokyo. You will find yourself impacted by the elevated prices of cherry blossom season. Conversely, you’ll enjoy some of the year’s best deals if you can only get a round trip to Ibiza in the winter low season.

See Related: How to Book the Cheapest One-Way International Flights

2. Jet Fuel Prices Impact Ticket Prices

Fuel Price

I’m sorry if you are tired of hearing about high gas prices on the news. Unfortunately, it’s a problem extending far past your weekly fill-up and is one of the biggest contributors to higher plane fares.

Airlines have special strategies that help them get deals on jet fuel, called hedging, but it is not a complete shield from the curse of fluctuating oil prices. Higher fuel costs lead to higher ticket prices, and there is no great way around it.

Factor Description Approximate Percentage of Total Cost
Labor The cost of salaries, benefits, and training for pilots, cabin crew, maintenance, customer service, and other employees. 30%
Fuel The cost of aviation fuel is one of the largest expenses for airlines and fluctuate based on global oil prices. 25%
Airport Fees Airlines must pay landing fees, terminal costs, and other charges to the airports they use. 15%
Aircraft Maintenance & Depreciation The costs associated with maintaining the aircraft and depreciation over the life of the plane. 15%
Taxes & Regulatory Fees Fees and taxes imposed by local and national governments, as well as international regulatory bodies. 10%
In-Flight Services The cost of meals, beverages, in-flight entertainment, and other services provided to passengers. 5%

The Case of Higher Jet Fuel Prices in the 2020s

One example we can easily look at is the massive dip, then spike, in oil prices in recent years. When the pandemic struck, oil prices plummeted to record lows.

Combined with the virtually zero demand for flight tickets, airlines were able to offer rock-bottom fares. However, the oil market recovered relatively quickly. Price rises made fuel more expensive, which ate profit margins as demand recovered more slowly.

See Related: How to Find Mistake Fares

3. Business Travelers Influence Flight Prices

Business Man with a Suitcase and a Newspaper

The airline industry loves business travelers. They are less price-sensitive than leisure travelers, meaning airlines can charge them a higher price. They are also likelier to book the more expensive plane seats up front, yielding decent profits.

How does this affect you, a presumably non-business traveler? You’d be surprised that it does, and quite significantly. How many individuals are on a flight on business affects how much money the airline makes and how much they charge everyone else.

The Impact on Non-Stop vs. One-Stop Routes

If you consider the typical business trip, it often involves connecting two major cities where companies are based. Airlines can charge premium airfares from these point-to-points since a business is less concerned with good prices and more concerned with convenient connectivity.

Take a flight from London to San Francisco, a hugely popular route for business travelers in the tech industry. Simple round-trip routes between this pair are generally very high for direct flights and even more ridiculous in business class.

However, if you forgo the non-stop options and are open to the inconvenience of changing planes en route, you can save some serious cash. You might have to put up with hanging around your transit airport and taking a little longer to get to your end destination.

See Related: Must-Know Vacation Tips

Premium Cabins

Business class is called business class because businessmen and women on work trips often fill the cabins. The higher prices airlines can charge lead to greater profits. Therefore, airlines will put business-heavy seat configurations on the appropriate routes to maximize profit.

An example is United’s choice to outfit some of their 767s in what is referred to as a ‘high-J’ format. They deploy these aircraft with more business class seats on routes with the most business travel.

This could help you save money: the more money they can make in the front of the plane, the lower they can reduce fares in economy class. While the logic works, this one isn’t always that simple, as the supply and demand of individual cabins have a large impact, too.

If you love flying business class internationally, this is where Going.com‘s elite membership comes into play, as you’ll get access to mistake fares and incredibly cheap business class fares. Use our promo code VIA20 for 20% off any premium membership.

See Related: Why So Many Flight Cancellations?

4. Avoiding Airspace Makes Airline Tickets More Expensive

Airline Ticket, Cash, and a Coin

The longer the airplane spends flying, the more fuel it has to use, the more the crew has to be paid, and the higher the price becomes.

And while you probably aren’t researching the route map to see how direct the journey is, you can monitor world events and travel news to get an idea of what certain things will do to our beloved low fares.

See Related: Things to Know When Flying with Cash

Conflict Zones and Safety

The airspace above them became a no-go zone when war broke out between Russia and Ukraine. For example, flights from London to Delhi needed significant detours, which led to extra hours of flying and great requirements for fuel. This greater fuel consumption led to rising prices for the consumer.

Such limitations on air space are nothing new. Due to the associated risks, many airlines have avoided North Korean airspace for years. For a long time, this has impacted international travel from Europe to South Korea and Japan.

Another prime example would be the closure of Afghanistan’s airspace in 2021 following the Taliban takeover. This added flight duration for those traveling to destinations like India.

See Related: Ways to Book the Cheapest First Class Flights

5. Airline Industry Competition Leads to the Lowest Fares

American Airline Aircraft

Going back to some basic economics, competition is good for the customer as it leads to the best prices. Maybe you’ve heard of some of the newest airlines in the US, like AveloBreeze, and Aha!, which have all appeared on the market recently.

The more they have to work to win customers with lower prices, the easier it becomes to find affordable flights.

The Rise and Fall of the European Low-Cost, Long-Haul Carriers

The golden days of trans-Atlantic travel were when we had ultra-low-cost carriers like WOW Air and Primera Air for less than $100 each way. No, it was not a particularly comfortable seat, and you had to pay for anything else, but how many people would turn down that price?

That was exactly why major airlines offering full service were forced to lower their fares and compete. Thanks to all that competition, you could get any flight for the same price. It also brought on the dreaded basic economy model that many full-service carriers have sadly adopted.

As a result of unsustainable business conditions and the pandemic, none of the above airlines exist anymore. That loss of competition drove transatlantic fares back up. Those ticket prices will be missed.

How do airlines’ dynamic pricing strategies work?

Airlines’ dynamic pricing strategies work by adjusting ticket prices in real time based on numerous factors. These include:

  • supply and demand
  • competition
  • booking time
  • seasonality
  • market conditions

Airlines continuously analyze these variables using sophisticated algorithms to set competitive prices to maximize revenue while ensuring flights are as full as possible.

Dynamics of a Route

As you might expect, if there is only one airline serving a particular market, that gives them the ability to charge the highest price possible. One example is that Fiji Airways is the only carrier to connect the island country to the US, making those flight prices particularly high. US airlines often complain about this as the Fijian government won’t allow competition.

On the other end of the spectrum, you have routes like Los Angeles to Honolulu, which nearly every airline in the US serves. Thanks to that competition, these ticket prices are often the same across the board.

See Related: Layover vs Stopover: What’s The Difference?

6. Domestic Flights May Be Cheaper Than International Flights

Plane Cabin Interior and Seats

If cost is a concern when booking your summer trip to the French Riviera, it may be worth considering a passport-free trip to the beaches of Florida instead. It’s sometimes the case that a domestic flight can be the better deal.

Alternative Airports

Not all airports in the US are equipped to handle international flights. A Customs & Border Patrol presence, security standards, and greater infrastructure must exist. Smaller regional airports that don’t have such facilities have lower operating costs, and therefore airlines can offer lower flight prices to and from them.

Besides, you can have a cheaper experience at these airports for parking and food. One notable example is the rise of Avelo at Tweed New Haven Airport in Connecticut, growing into an alternative to Boston.

Lower Taxes and Fees for a Lower Ticket Price

Even if you are flying to or from a major international airport, you can avoid certain taxes and fees attributed to flights leaving the US. Custom, security, and landing fee charges won’t apply to your flight.

See Related: What is a Hacker Fare?

7. Inflation

Inflation VISUAL WITH STACKED COINS
Andrey Popov / AdobeStock

The consumer price index rose a mere 6.5 percent in 2022 compared to the average airfare prices within the US, rising to a whopping 28.5 percent. The cost of travel is running miles ahead of the rate of inflation, and this alone is putting major pressure on the pricing strategies of airlines.

The percentage increase affects a whole myriad of important factors. From the salaries of airline staff to the cost of the bag of pretzels they hand out in-flight, everything is affected.

8. Shortage of airline staff

Ground Crew at the airport
antonpedko / AdobeStock

According to data from CBS News, the airline industry is short a staggering 32,000 staff. That’s a shortage of mechanics, air traffic controllers, and pilots. What’s more, these shortages aren’t going anywhere anytime soon. We’ll continue to see a negative impact from shortages for many years.

The shortage first arose as a result of the pandemic. While most airlines build back their routes, they’re still not quite at full capacity. There’s a struggle across the industry to keep up with the great travel comeback.

Efforts are being made to resolve the issue, like pay increases and focussed pilot trainer programs. But, such rising operating costs lead airlines to recoup their money through increased fare prices.

How to Save Money on Airfare Costs

Holding paper Bills

So, now we’ve gone through some of the key reasons that answer the burning question as to why flights are so expensive right now: how can you find a bargain?

While some factors in higher airfare costs are unfortunate things that we can’t help as a traveler, there are at least some tips and tricks to get the best prices, even when airline tickets seem sky-high.

1. Use Tools Like Skyscanner and Going.com to Find Cheap Fares

First, there is power in numbers, and you’ll need to search as widely as possible to find that cheap flight you need. Rather than searching airline websites, sets of dates one by one, and each destination one by one, make your life easier with a tool such as Skyscanner.

We’ve done plenty of articles on Skyscanner and how it aggregates all of the flight details mentioned above and puts them into one search to get you the best price.

Save yourself hours in some cases by using this simple site. To save even more hours, sign up for Going.com to get alerts every time there are crazy deals departing your city.

2. Consider Basic Economy Fares

While they are most hated, basic economy fares can be a decent solution for the right traveler. If you’re happy with the middle seat, don’t need luggage in the hold, and can bring your snacks, you can save a lot of cash on these tickets.

3. Compare Budget Airlines to Major Airlines Carefully

The above being said, if things like seat selection and ticket flexibility are important to you, weigh your options carefully.

A budget airline might offer a super-low fare but come with additional costs. You can get your seat at a bargain but must pay extra for everything else, like extra baggage, inflight entertainment, and food. So, your final ticket price on many of these low-cost airlines could actually end up being the same as the average airfare on a full-service carrier.

With this in mind, it’s great to save money booking through budget airlines. Just make sure to snoop around first at the average airfares on offer across the board to get the most reasonably priced and comfortable trip.

4. Use a Good Credit Card Strategy

Use credit cards strategically and wisely! Many airlines offer a co-branded credit card, which gets you perks like free bags, free seats, or even status. It’s the same logic as opening a credit card for a certain hotel chain.

Alternatively, you can still make a good decision if you don’t have one of these cards and aren’t in the market to open a new account. Most travelers have a credit card that provides travel perks like lost luggage or rental car insurance.

Some cards offer cashback on certain purchases. Know your cards and what they offer. This can directly or indirectly save you money and make your trip a whole lot better.

You can pair these with cashback shopping portals such as Capital One Shopping or Honey, where you will earn additional rewards, which translate directly into savings. Both are browser extensions, so it’s as passive as it gets to earn some form of money back on expensive flights.

See Related: How to Earn Airline Miles Without a Credit Card

FAQs

When will flight prices drop?

Flight prices will likely drop during off-peak seasons when the demand for travel decreases. Also, midweek flights, especially those scheduled during nighttime, are often cheaper due to lower demand.

Why are last-minute flights so expensive?

Last-minute flights are typically more expensive due to the principle of supply and demand. As the departure time approaches, the number of available seats decreases, causing airlines to increase prices.

Does the age and efficiency of an airline’s fleet affect ticket prices?

Yes, an airline’s fleet’s age and efficiency can impact ticket prices. Newer, more fuel-efficient aircraft consume less fuel, lowering airline operating costs. These savings can sometimes be passed on to consumers through lower ticket prices. Conversely, older, less efficient planes can increase ticket prices due to increased maintenance and fuel costs.

Why do flight prices fluctuate so often?

So, why are flights so expensive right now? Why do they tend to fluctuate throughout the year? Well, consideration must be directed to the numerous factors determining airfare prices.

Flight prices often fluctuate due to dynamic pricing strategies implemented by airlines. This system, driven by algorithms, considers factors like travel demand, competition, time of booking, and seasonality to adjust prices in real time. As these factors constantly change, so do flight prices. If you’re after a cheaper fare, you must monitor these factors to find flights within your budget.

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