Higher airfares and fewer flights welcome vacationers after COVID-19 concerns ease

KYLE ARNOLD The Dallas Morning News

The COVID-19 worries that have eclipsed the holidays for the past two years are being replaced by the revenge of the pandemic — higher airfares, crowded airports and fewer plane seats for the Thanksgiving and Christmas holidays. Christmas.

All of this is forcing hopeful vacationers to rethink their plans, rethink their strategies and reevaluate their expectations of when and how to travel.

Airline executives say customers are moving their flights to less popular days to take advantage of work-from-home policies, reducing price variability and potentially making it harder for low-cost shoppers looking to fly on off-days point.

Airfares could be 22% higher than they were in 2019, forcing eager travelers to book seats early in hopes of securing bargains.

The continued shortage of pilots is limiting flights to smaller towns, pushing more people to major metropolitan airports.

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The overwhelming advice from travel agents and booking experts is to book plane tickets now, because they won’t be cheaper.

“People ask me if they should buy their tickets now or wait until later,” said Sudeep Shah, a Richardson, Texas-based travel agent and owner of Travel King. “Listen to me, in the last couple of years we’ve never seen prices really come down – like no price cuts at all.”

Airfare inflation

A survey by business and consumer advisory group Deloitte found that fewer Americans are planning trips this holiday season, mostly due to financial concerns, a need to spend money on other things and concerns about travel disruptions. Worries about COVID-19 are lower on the list, but still a travel planning factor for about 1 in 6 people before the coldest winter months.

From Dallas airports, a round-trip ticket to a domestic location will cost travelers about $332, or 6% more than in 2019 during the Christmas travel period, according to travel website Hopper. International tickets will cost about 10% more, or an average of $1,539 for a round trip.

“Demand is still quite high, especially for holiday travel this year,” Shah said.

Thanksgiving airfares roughly track 2019 prices, said Hayley Berg, Hopper’s chief economist. But with around four weeks until Thanksgiving Day, time is running out to get tickets for the November holiday period without paying last-minute prices.

“As we get closer to Thanksgiving, prices are going to start going up $10 to $15 a day,” Berg said. “We get a lot of travelers who have booked for Thanksgiving and then think they have a few weeks to book for Christmas and they end up on the boat where there are no flights available or the prices are sky high.”

After airfare prices hit historic lows in 2020 and 2021 due to COVID-19 and travel restrictions, prices have surged again this year. According to the consumer price index, airfares in May and June 2022 were 21% higher than in the same period of 2019. Airfare inflation has since slowed, but not as much as the experts had predicted it.

Notes in September were still 8% higher than three years ago, which is unsurprising given that headline inflation is up around 15% over the same period.

Fewer places, more competition

Despite rising wages for workers and headwinds such as rising gas prices and other inflationary pressures, the main reason airfares are more expensive this year is because major airlines are offering fewer seats on their planes.

The capacity of the four major network airlines in the United States is down about 6% in November and December compared to 2019, according to flight data company Cirium. Capacity at Fort Worth-based American Airlines is down 5.1%, United is flying 8.6% less and Delta will have 6.8% fewer seat miles available to passengers this year.

Dallas-based Southwest is flying a handful more flights, but fewer seats and seat miles, the main indicator of airline capacity.

Indeed, airlines have drastically reduced their spring and summer schedules as a shortage of pilots and other challenges have led to increased delays and cancellations. Airline executives said they were only focused on scheduling as many flights as they could reliably operate.

“We continue to size the airline based on the resources we have and the operating conditions we face,” American Airlines CEO Robert Isom said during the company’s second quarter earnings call. the society. “This approach and our strong operational performance in September and so far in October gives us a lot of confidence as we head into the busy holiday season.”

Harder to find bargains

Airline executives boasted this month that travelers are moving away from traditional peak holiday dates and flying on days when traffic is generally lighter.

This is great news for airlines, but not so good for bargain-seeking travelers hoping to save money by flying on a Tuesday or Wednesday instead of a Friday or Sunday.

“There has been a permanent structural shift in the demand for leisure due to the flexibility that hybrid working allows,” United Airlines CEO Scott Kirby said during its second quarter earnings call. company. “With hybrid working, every weekend could be a holiday weekend. That’s why September, a normally off-peak month, was the third strongest month in our history.

American Airlines Chief Commercial Officer Vasu Raja said new travel trends have smoothed out the “peaks and troughs” of times around holidays such as Thanksgiving, when there’s usually a flier rush on Wednesdays and on Sundays, but fewer travelers on other days during the week.

“We indeed anticipate that it’s not just that Thanksgiving weekend, for example, will be at its peak, but even the days around it, we will have a level of demand,” Raja said.

Cowen airline analyst Helane Becker said this could lead to price changes for customers.

“The hybrid work environment allows people to travel differently, either well before the holidays when fares might be more attractive for a leisure customer, or to return well after the peak day of travel for a similar reason,” Becker said in a note to investors. “We expect the result will be fewer fare offers to encourage travel on certain days and more consistent pricing throughout the week.”

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