Airfares Surge By Record Numbers As Travel Demand Rises Again

Data released by the United States government recently revealed that airfares surged by over 40 percent in September 2022 compared to the same month in 2021. It is the fastest rate increase ever recorded in US airline history. 

The Bureau of Labor Statistics Consumer Price Index (CPI) released more accurate figures, showing that airfares climbed 42.9 percent. This was partly because of the cutting down on flights. Rising fuel costs also was a key contributing factor.

A more detailed report by the CPI showed that prices increased by 8.2 percent for the past 12-month period. The increase was 0.4 percent in September 2022. According to last month's report, airfares are rising by 33 percent annually. 

Airlines Look To Wipe Out Past Losses

The record increase in airfares compared to other goods and services can be attributed to specific factors. The travel and hospitality industries were worst hit by the pandemic and subsequent global lockdown. In September 2021, the United States saw a surge in COVID-19 cases.

The availability of a limited number of seats meant that passengers were paying more for flight tickets to their destinations. As private and corporate travel demand continues to rise, carriers are looking to wipe out losses and earn profits again.

Holiday Season To Give a Huge Impetus To Airline Bookings

With the holiday season fast approaching, airfares are expected to continue to rise. Already, Thanksgiving, winter holidays, and Christmas period airfares are up by 55 percent from last year, according to recent stats. They are 19 percent higher than 2019 airfares.

Industry experts estimate that the average airfare for a domestic round-trip ticket for Thanksgiving will be around $350.  The fare for Christmas is expected to reach $643. These figures reflect a 22 percent increase over the fares paid in 2019 and a whopping 43 percent more than what passengers paid during the 2021 holiday travel season.

Airlines are eyeing even better times, according to travel experts. They expect a significant increase in air ticket bookings as the holiday season closes in. 

The trend observed over the past several years, excepting the ones affected by COVID-19, of course, is that the six-week period starting just before Thanksgiving until the week after New Year is the most lucrative for airlines.

A Higher Demand Expected This Year

Despite operating at a limited capacity, most airlines are enjoying record-high revenues in the third quarter of 2022. After suffering heavy losses for two years because of the pandemic, airlines are steadily returning to profit-making. The higher prices are adding to the healthy bottom lines of leading carriers.

The demand for holiday travel is going to be even bigger this year as travelers, forced to stay home during the pandemic, are keen to release their pent-up travel desires. Plans are being drawn to visit popular travel destinations and families this year. Airlines are expected to have a more than busy holiday season in 2022.