A recent CNBC report breaks down the reason behind the rarity of cheap airfare costs, and further suggests that the scenario will likely remain into 2023 amid increasing traveling demands, higher fuel prices and limited seat availability.
“Holiday flights are going to be expensive once again,” Founder of flight-deal site Scott’s Cheap Flights, Scott Keyes, said. “The pricing power has shifted back to the airlines for winter holiday travel.”
According to a recent CNBC report, travelers continue becoming and even seeking new ways of traveling that align with less strict office attendance policies despite high costs fueled by high inflation and rising interest rates.
“Demand has not come close to being quenched by a hectic summer travel season,” Delta CEO Ed Bastian said on the carrier’s quarterly call last week.
After experiencing its most recent domestic airfares peak in May, airfares are now averaging $274, reflecting a 19% increase from last year’s Thanksgiving deals, while domestic round trips for Christmas season are now averaging $390, a 40% increase.
“If you go look at our Thanksgiving schedule right now, there’s less peak-to-trough variability there than certainly I’ve seen in the schedule for a number of years,” Vasu Raja, American’s chief commercial officer, said on an earnings call on Thursday.
The three biggest U.S. airlines — Delta, United and American all confirmed recent prosperous financial quarters, and projected the market to remain profitable through the end of the year as consumers continue booking flights for the holidays.
The figures reflect a complete recovery from the delays, suspensions and losses caused by the COVID-19 pandemic, and a positive result following the $54 billion in taxpayer investments.
“With hybrid work, every weekend could be a holiday weekend,” United CEO Scott Kirby said on the company’s quarterly call Oct. 19. “That’s why September, a normally off-peak month, was the third strongest month in our history.”
Airlines have also confirmed plans to maintain trans-Atlantic trip schedules as an influx of travelers make their way to Europe this fall.
“United and Delta recently said they will ramp up spring and summer flying across the Atlantic, a sign they expect demand to continue to recover well into 2023,” a recent CNBC report states.
Customers tend to be more flexible with their travel dates outside of holiday weeks.