Why Summer Flights Are Costly This Year?

A speedy jaunt to Costa Rica in mid-May seemed like a perfect remedy for a sun-starved denizen of a Chicago workspace—until she noticed that her round-trip flight ticket would cost her a whopping $1,300.

In the same vein, a duo from New York City snagged a pair of rare tickets to the Amsterdam exhibition by Vermeer this spring, but their fortune ran out when they had to pay over $4,000 for their return flights.

Similarly, a family of four residing in the Bay Area deemed that this was the time for a trip to the familial motherland in Eastern Europe—but in the interim, their airfare expenses had escalated to over $6,000—nearly twice what they had originally anticipated. Rather than postponing their journey, they surrendered their credit card and understood that this entailed cutting expenses elsewhere.

There is no denying it. When it comes to reserving air travel in 2023, "the sticker shock is absolutely real," as reported by Hayley Berg, an economist at the Hopper air travel booking app. "Almost every part of the world is witnessing a price surge."

According to Berg, about a third of Hopper's search inquiries pertain to Europe, with average airfares having increased by 32 percent in contrast to 2022. On a significant commercial airline, travelers should expect to pay roughly $1,000 for round-trip international flights, and demand for premium economy and business class has also increased the fares of those flights.

Hopper reported that, compared to the previous year, fares from the United States to Athens have increased by 45%, averaging approximately $1,100 for a round trip. Furthermore, fares to Barcelona and Rome have increased by more than 40% compared to 2022.

So, Why Flights Are So Expensive in 2023?

The current exorbitant pricing of flights in 2023 can be attributed to a complex combination of factors. A multitude of economic conditions have converged to create a perfect storm that is driving airfares up. There are four primary reasons for the soaring costs of flights at present.

The Impact of Inflation on Airfares

Inflation is one of the leading causes of the high prices in the travel industry. This is not unique to airlines as inflation is pushing the prices of most basic goods higher in 2023. This rise in costs is affecting everything from pilots’ salaries to the price of snacks on flights. The escalation in airfares is actually outpacing inflation rates, with recent reports indicating that ticket prices are significantly outpacing the rate of inflation. The average airfare in the United States rose by 28.5% in 2022 compared to the previous year, while the Consumer Price Index, which is the most widely-used measure of inflation, only rose by 6.5% for the same period.

Rising Jet Fuel Costs and Airline Expenditures

Another significant factor driving up flight prices is the cost of jet fuel. Jet fuel is typically one of the biggest expenditures for airlines after labor, and the cost has risen significantly since the early days of the pandemic. The war in Ukraine is partly to blame for the increase in oil prices. In 2021, oil cost around $65 per barrel, but it has exceeded $100 per barrel during the past year.

The Consequences of Delayed Aircraft Manufacturing

The insufficient supply of new airplanes is also a constraint. Airlines expected to replace older planes with more fuel-efficient models they had on order, but both Boeing and Airbus have experienced delays in manufacturing and delivering aircraft due to ongoing supply chain problems.

The Persistent Staffing Shortage in the Airline Industry

Lastly, airlines are still grappling with a persistent staffing shortage, which is driving up prices even though travel has returned to pre-pandemic levels in many markets. The lack of crew members is a direct result of airlines still building back their route networks and not having enough pilots and other airline staff to manage more capacity. Airfares, as Gary Leff, founder of the road warrior website View from the Wing points out, are fundamentally a function of supply and demand, and demand has outpaced the airlines' ability to scale back up.

Are Airfares Expected to Decrease or Have They Reached a New Normal?

The prevalence of airfare pricing seems to be on the minds of many as we consider the future of travel. With the supply side of the equation remaining tight and the demand side skyrocketing, it appears as though airlines are charging top dollar for their services. In fact, several airlines are reporting record booking volumes since the start of the year due to what industry insiders call "revenge travel" and pent-up demand. Diana Hechler, President of D. Tours Travel based in Larchmont, New York, explains that individuals who are committed to traveling will pay the going rate, making it increasingly difficult to find decent airfare and lodging deals. Ultimately, airlines will only charge what the market can bear, and as long as they can get away with it.

According to Michael Derchin, a seasoned airline analyst, two factors could alleviate this situation. Firstly, the looming possibility of a recession could soften demand and drive down airfare prices. Secondly, Boeing recently announced that it will expedite the delivery of new aircraft, which could be beneficial in reducing the backlog of planes on order, making airlines more eager to put these planes into service.

How to find a good airfare deal?

Despite the prevailing circumstances, experts say there are still ways to find affordable airfare deals. The key to success is to be vigilant and to time your booking carefully. For domestic travel, it's best to book 1 to 3 months in advance and 3 to 7 months prior to holiday periods. For international trips, aim to book at least 2 to 4 months ahead, and more if traveling at the peak of the season.

Flying with a budget airline can also help keep costs down, and there are some new players in the game this year, such as Icelandic upstart Play and Norwegian discounter Norse Atlantic. According to travel expert Katy Nastro of Going.com (formerly Scott's Cheap Flights), this can help you get to Europe this summer and potentially save hundreds of dollars by taking shorter flights or alternative means of transportation to reach your final destination.

In addition to scrutinizing budget-friendly airlines, there exist alternative approaches to augment the likelihood of acquiring a reasonably priced flight. Herein lie several recommendations from adept individuals:

• Become a member of an airline's loyalty program to ensure that you are included in their electronic correspondence and to gain advanced knowledge of momentary deals—this can be accomplished either via the Internet or by utilizing the airline's applications.

• Enroll in notifications from applications that are administered by fare assessment and reservation websites like Kayak and Hopper.

• Exploit a fare evaluation timetable: If your intended travel dates are not rigid, utilize the fare schedules on airline websites or on an airfare evaluation platform such as Google Flights to obtain a comprehensive view of airfare fluctuations on various days of the week and even across different periods throughout the year.

• Engage in the acquisition of a vacation bundle that encompasses air travel and lodging; air carriers will frequently propose a lower airfare cost for those that opt for a bundled alternative (for instance, via JetBlue Vacations or British Airways' air and hotel package deals—the British Airways' offers, in particular, are exceedingly appealing).