The COVID-19 worries that overshadowed the holidays for the last two years are being replaced with the pandemic’s revenge — higher airfares, crowded airports and fewer seats on planes for the Thanksgiving and Christmas breaks.
All that is forcing hopeful holiday travelers to rethink plans, re-strategize, and reevaluate expectations for when and how to travel.
Airline executives say customers are shifting flights to less popular days to take advantage of work-from-home policies, leading to less variability in pricing and potentially making it harder on bargain shoppers looking to fly on off-peak days.
Airfares could be 22% higher than they were in 2019, forcing wishful travelers to book seats early in hopes of getting good deals.
The ongoing shortage of pilots is limiting flights to smaller cities, pushing more people to major metropolitan airports.
The overwhelming advice from travel agents and booking experts is to book plane tickets now — because they won’t get any cheaper.
“People are asking 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 two years, we have not seen prices ever really go down — like no price drops at all.”
Airfare inflation
A survey from business and consumer consulting group Deloitte said fewer Americans are making travel plans this holiday season, mostly over financial concerns, a need to spend money on other things and concerns about travel disruptions. Concerns over COVID-19 are lower on the list but still a factor in travel planning for about 1 in 6 people heading into the colder winter months.
From Dallas airports, a round-trip ticket to a domestic location will cost travelers about $332, or 6% more than 2019 during the Christmas travel time frame, according to travel website Hopper. International tickets will cost about 10% more, an average of $1,539 for a round trip.
“Demand is still pretty high, especially for holiday travel this year,” Shah said.
Thanksgiving airfare is tracking roughly in line with 2019 prices, said Hayley Berg, Hopper’s lead economist. But with about four weeks left until Thanksgiving Day, time is running out to get tickets for the November holiday travel period without paying last-minute prices.
“As we get closer to Thanksgiving, prices will start spiking $10 to $15 per day,” Berg said. “We get a lot of travelers that have booked for Thanksgiving and then think they have a few weeks to book for Christmas and they end up in the boat where there are no flights available or prices are exorbitant.”
After airline ticket prices hit historic lows in 2020 and 2021 due to COVID-19 and travel restrictions, prices came soaring back this year. Airfares in May and June of 2022 were 21% higher than during the same stretch of 2019, according to the consumer price index. Plane ticket inflation slowed since, but not as much as experts predicted.
Tickets in September were still 8% higher than three years ago, not surprising considering that overall inflation is up about 15% over the same period.
Fewer seats, more competition
Despite rising wages for workers and headwinds such as higher gas prices and other inflationary pressures, the biggest reason airline tickets are pricier this year is that major airlines are offering fewer seats on their planes.
Capacity at the four major network airlines in the U.S. is down about 6% in November and December compared with 2019, according to flight data company Cirium. Fort Worth-based American Airlines’ capacity is down 5.1%, United is flying 8.6% less and Delta will have 6.8% fewer seat miles available this year for passengers.
Dallas-based Southwest is flying a handful more flights, but fewer overall seats and seat miles, the major indicator of airline capacity.
That’s because airlines significantly chopped schedules in the spring and summer as a shortage of pilots and other challenges led to a spike in delays and cancellations. Airline leaders said they were focused on only scheduling as many flights as they could run reliably.
“We continue to size the airline for the resources we have available and the operating conditions we face,” American Airlines CEO Robert Isom said during the company’s second-quarter earnings call. “This approach and our strong operational performance in September and so far in October give us a lot of confidence as we head into the busy travel holiday season.”
Harder to find bargains
Airline executives bragged this month that travelers are shifting plans away from traditional peak holiday dates and flying on days that would typically see lighter traffic.
That’s great news for airlines, but not quite as good for bargain-oriented travelers hoping to save money by flying on a Tuesday or Wednesday instead of Friday or Sunday.
“There has been a permanent structural change in leisure demand because of the flexibility that hybrid work allows,” said United Airlines CEO Scott Kirby during his company’s second-quarter earnings call. “With hybrid work, 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 the new travel trends have smoothed out the “peaks and troughs” of periods around holidays such as Thanksgiving, when there is usually a rush of flyers on Wednesday and Sunday, but fewer travelers on other days during the week.
“We are indeed anticipating that it’s not just that the Thanksgiving weekend, for example, will be peak, but even the days around it, we’ll have a level of demand,” Raja said.
Cowen airline analyst Helane Becker said that could result in a change in pricing for customers.
“The hybrid work environment enables people to travel differently, either well before the holiday, when fares might be more attractive to a leisure customer, or return well after the peak travel day for a similar reason,” Becker said in a note to investors. “We expect the result will be fewer fare deals to encourage travel on specific days, and more consistent pricing throughout the week.”
