Fuel pricesand high demand has increased plane ticket20% in March compared to the same period in 2019.
- Online spending for domestic flights soared to $8.8 billion in March, 28% above pre-pandemic levels.
Travelers could feel a dent in their wallets this year as rising fuel prices and strong demand drive up airfares.
On Tuesday, the Adobe Digital Economy Index released data revealing that travelers spent $8.8 billion on online flight reservations in March, a 28% increase from the same period in 2019. So while spending was up, bookings themselves were actually only 12% higher than in March 2019, the data showed.
Additionally, in the first quarter of 2022, consumers spent $21 billion on domestic airline tickets. To put that figure into perspective, passengers spent a total of $56 billion in 2021, according to
Data from the U.S. Gulf Coast shows jet fuel trading at $3.343 a gallon on April 11. The price is about 35% higher than at the start of 2022, which saw a fuel price of $2.195 per gallon on January 3, and double the price during the same period. Last year.
Fuel prices have contributed to skyrocketing inflation, which this year is rising at its fastest pace since 1981, according to a report from the US Department of Labor released on Tuesday. Airfare inflation drove prices up 20% in March 2022 compared to March 2019, according to Adobe data. By comparison, the data showed air fares rose 5% in February and actually fell 3% in January.
Meanwhile, data from travel app Hopper shows a 40% increase in airfares since the start of 2022, with an average domestic round-trip ticket costing $330. The company expects ticket prices to rise another 10% in May.
Typically, the changes will be reflected in airfares over the next few months, but Hopper explained that “the extent to which it appears may vary depending on airline coverage programs and how much of the cost is passed on. on the consumer”. However, airlines may absorb some of these costs, the company said.
Hedging is a strategy some carriers, like Southwest Airlines, use to ensure they aren’t hit by unexpected increases in jet fuel prices, like the war-induced spike in Ukraine. The company commits to buying fuel months or years in advance at a fixed rate, which allows it to offset rising costs.
According to news outlet Axios Atlanta, Southwest covered about 64% of fuel for the remainder of 2022, while rival American Airlines stopped covering in 2014.
Although consumers may be put off by higher ticket prices, they are more willing than ever to shell out more for flights after two years of travel restrictions, CNBC reported.
He also said travel demand would remain strong enough over the next two to three months to allow Delta to cover the higher cost of fuel, the AP reported.
Adobe Digital Insights senior analyst Vivek Pandya explained that strong travel demand is fueling inflation.
“The outburst of pent-up demand has been a major driving factor as the desire to travel by air returns more aggressively than expected,” Pandya said.