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Delta Airlines CEO, Ed Bastian, has suggested air fares will increase by up to 30% in the summer months. With rising fuel costs, rising demand, and the end of the COVID-19 pandemic—travelers are witnessing rising air fares in the United States and the rest of the world.
When speaking to investors, Ed Bastian said: “We expect pricing this summer to be up probably somewhere between 25% and 30% on average,”
He added: “We’ve never seen anything of that scale.”
According to statistics, airfares in the United States are up by 25% in the previous 12 months. In fact, airfares jumped by a staggering 16.8% in April alone.
So what should travelers do? Read on to find out!
What Has Delta Airlines Said and How Will It Affect Travelers?
Delta Airlines has predicted its revenue in Q2 will be back to pre-pandemic levels for the first time, even with fewer flights than in 2019. They expect their revenue to be up 8% more than previously expected.
So this is good news for the airlines, right?
Sure.
But it’s not great for travelers like me and you.
The rising fuel costs are due to soar up to 22% above 2018 levels on a per-seat basis, which is more severe than the mid-April forecast of 17%. In addition, many airlines are contending with staff shortages that sometimes require higher worker pay.
As a result, Delta Airlines are raising flight prices to make up for the increased fuel costs.
Although thousands of travelers are complaining about the rising airfares on social media, many airline executives are reluctant to say it’ll deter travelers from traveling this year.
Speaking at the same event, United Airlines CEO Scott Kirby, said: “It you’re worried about pricing destroying demand, you are betting against history,”
He suggests air fares are only back to where they were in 2014 after adjusting for inflation.
Helane Becker, Senior Research Analyst at Cowen, told Bloomberg TV on Monday: “We’re worried about September and what happens in the fall. Avgas prices are going up and up. Airlines are finding labor costs are going up, fuel costs are going up, airport costs are going up. They are facing huge inflationary pressures and need to raise ticket prices and at some point, the consumer is going to say ‘okay, we’ve done our travel, and we’re done, we cannot (afford) to fly again,”
What About International Travel?
For the most part, the increased domestic demand in the United States is driving the rise in flight prices. Although some Americans are traveling overseas after the COVID-19 pandemic—numbers are still down on pre-pandemic levels.
Therefore, international airfares purchased in the United States remain down on pre-pandemic levels.
So travelers can still find excellent deals of flights to Europe, South America, and even the Caribbean or Mexico.
Americans looking to travel within Europe will face the same issues with flight prices. According to Ryanair CEO, Michael O’Leary, flight prices in Europe may increase to a “high single-digit per cent.”
He said: “It seems to us that there will be higher prices into that peak summer period because there’s so much demand for the beaches of Europe and those price rises going to continue,”
The Fast Travel Rebound: How This Affects Travelers
Travel has returned back to pre-pandemic levels within North America in 2022, which is faster than many economists and travel experts expected.
In turn, this has enabled airlines to raise prices for travelers.
However, despite the sharp rebound, travelers are witnessing enormous waiting times and issues at airports due to airlines failing to prepare for the massive travel rebound.
There is also a massive shortage in pilots in the United States. Delta Airlines recently trimmed its summer schedule by up to 3% to enable more time between flights and a smoother service in light of the recent issues.
Final Thoughts
Don’t let the rise in prices put you off traveling in 2022. There are still excellent flight deals out there—especially to Mexico and Europe.
Yes, flights are skyrocketing in the United States. But with the world finally reopening, now might be the best time to travel overseas.
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