COVID-19 fundamentally shifted the way airlines in the United States do business. By taking
business meetings that were once face-to-face online and collapsing what had been the lucrative
market of business trips, the pandemic changed the way airlines made money. Rather than
catering to businessmen that traveled for work in the past, airlines now have to sell to
individuals, more predominantly those traveling for leisure. Since post-pandemic travelers are
paying out of their own pockets, they increasingly look carefully at what they’re getting for the
price. More comfortable seats, more amenities, and a better flight schedule or connections are
now considered to be worth an upcharge. This leisure clientele that now fills the market is also
increasingly wealthy and able and willing to pay for these upgrades. This phenomenon is driving
low-cost carriers out of the market. Some, like Spirit, have declared bankruptcy. Many carriers,
especially low-cost carriers that have to fill flights to turn a profit, are shrinking to only their
most profitable routes, which are increasingly touristic. Referring again to Spirit, we see that
they have doubled down on Florida as a key market and hub, shuttling Disney-goers and Hard
Rock Casino-hangers in and out of the state. JetBlue has similarly made changes, rescheduling
traffic so it can reduce the size of their fleet of aircraft while offering flights at times that appeal
to leisure travelers. They have also expanded their business class seating on certain routes whose
client base is more wealthy. These adjustments mean that airlines are offering fewer, more
expensive flights, as you might have noticed if you tried to book a trip recently. The increase in
prices sparked by COVID has been compounded by unavoidable increased costs faced by
airlines. Yahoo Finance reported that domestic and international rates have increased 22.17%.
The dramatic fall of oil prices in 2020 and its subsequent correction are responsible for a historic
rise in the cost of fuel. On April 20, OPEC exceeded production limits and the price of oil went
below $0 for the first time in American history. Refineries simply stopped refining, and when
the market corrected itself, there was a shortage. The price increase you saw at your local pump
was the result of refineries scrambling to rehire workers and increase production
post-lockdown. But when airline travel picked up again, the cost was even greater. Since 2019,
the price of jet fuel has risen 25-30%, and all of the layoffs from the uncertain days of COVID left
airlines understaffed in a time of high labor costs. Consumers shouldered the expense of
rehiring airline staff by paying higher ticket prices. All in all, the CPI (consumer price index)
shows that the average price of flights out of the US has risen from $224.90 to $274.76. While the
days of low-cost flights may appear to be behind us. media outlets offer methods to save on
travel. For domestic flights, book 28 days in advance to ensure lower rates as last-minute tickets
cost more. But don’t book too early, as booking 4-6 months in advance is shown to result in
higher rates for international flights; look to book around 60 days in advance for best prices.
Prices look to have stabilized, but in the future, you never know.