Airfare costs have taken off ahead of a summer travel season running on steep demand and high gas prices, according to new price inflation data released Wednesday.
The record-breaking cost increase for airline tickets stood out in a Consumer Price Index report that showed an overall 0.3% increase in the cost of living from March to April and an 8.3% rise year over year.
The cost of airfares increased by 18.6% from March to April. That’s the highest-ever monthly increase for the expense since the Bureau of Labor Statistics started compiling data, the agency noted.
The second closest month-over-month increase was 10.7% — and that was the rise from February to March of this year, data show.
Overall, the cost of airfares climbed 33.3% year-over-year, rivaling steep rates of increase last seen in 1980 and 1981. (The largest year-over-year increase came in September 1980, at 45%.)
Don’t expect travel costs, like many other expenses, to come down any time soon, said Dawit Kebede, senior economist at Credit Union National Association. “The housing shortage, increased demand for summer travel, and supply constraints due to the lockdown in China will make it difficult for these prices to fall in the coming months,” Kebede said.
Ahead of Wednesday’s report, travel industry experts had been saying people ought to stay seated when they shop around for prices these days.
“Rising jet fuel prices, surging demand, and lower overall capacity compared to 2019 are together driving the highest airfare for summer travel on record for at least the past 5+ years,” wrote Hayley Berg, lead economist at Hopper, a platform to shop for flights and hotels.
Passengers paid an average $358 in April for round-trip domestic flights, up 12% from March, according to Hopper. They paid $865 for round-trip international flights, an 8% increase from a month earlier.
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The CPI numbers come while gas prices are revving back to record highs. After setting new records in March amid Russia’s invasion of Ukraine, gas prices hit new records again Tuesday — and then again on Wednesday as well. The average cost of a gallon of gas was $4.40 on Wednesday, up 3 cents from a day earlieraccording to AAA.
Like gasoline, jet fuel is more expensive in a roiled crude oil market. Jet fuel prices across the world are up 11.6% from a month ago and more than 146% from a year ago, according to a jet fuel price monitor from the International Air Transport Association. In North America, it’s been a 4.6% month over month increase and a 178% yearly increase.
Despite high-priced gas, many people aren’t dialing back their driving habits, some aggregate data suggest. Likewise, many airline passengers could be willing to stick with their flights despite the higher costs.
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Airlines are projected to carry around 2.4 million travelers every day this summer, versus the 2.9 million daily travelers during the 2019 summer travel season, Berg said.
security checkpoint traffic numbers from the Transportation Security Administration show the same trend, at least during April. There were more people going through TSA checkpoints in April, compared to April 2021 and definitely compared to April 2020. But the levels were still below April 2019.
Major airlines say they’ve been staffing up and trimming flight schedules to avoid overextending themselves in the brisk travel season ahead.
Credit: www.marketwatch.com /