As summer travel season arrives, airfares are sky-high
After being mostly grounded for two years, Americans rushed to book summer flights this year — and are paying very heavy prices for their tickets.
Airlines plead an imbalance between supply and demand. A shortage of pilots. Soaring jet fuel prices. Those factors are real.
Yet airline analysts now see something more deliberate at play.
As people have begun to balk at the sky-high prices, and some switch plans away from flying, demand has softened. The airline response is not to lower the fares, but to keep them high by further cutting the supply of seats.
“They’re starting to see some resistance from flyers to paying those fares,” said George Ferguson, senior aerospace and airline analyst at Bloomberg intelligence. “At that point, you either lower fares and fill airplanes, or keep fares high and start to cut capacity. So we’ve seen them cutting capacity.”
In short, airlines are continuing to reduce their schedules in July and August not necessarily because they don’t have enough pilots but in part to keep ticket prices high and maximize profits.
“They know how many pilots they have to fulfill that schedule. And they’re still cutting,” Ferguson added. “The pilot shortage is a bit of a convenient excuse here. I think they can’t fill airplanes at the fare levels that they’re offering. And so instead of cutting those fares and lowering their profitability, they are cutting the schedule.”
A recent economy-class ticket from Seattle to New York cost just over $1,000. A nonstop trip from Seattle to Cincinnati runs $1,300. And Seattle-Los Angeles will cost $400-$500.
For many, the high prices dramatically bump up the cost of a vacation. For those who must travel on short notice, perhaps for family reasons, it may not be a matter of choice.
In a country as big as the U.S., with few practical alternatives for longer journeys, the airline network is a vital piece of the nation’s transportation infrastructure — now being priced out of the reach of many people.
Airline industry analyst and consultant Bob Mann said that if not for all the pent-up travel demand, “there’s no way anybody would be buying travel at these prices.”
“There’s a view that because there’s a surge in demand, the airlines think they can charge whatever they want,” he said.
“Mind-boggling” fare inflation
The air travel system in the U.S. is patently under strain, beset by delays and flight cancellations that cause huge inconvenience and often great additional expense to travelers.
In April and May, Alaska Airlines didn’t have enough pilots to fly its schedule, resulting in hundreds of canceled flights. As it struggled to cope, the Seattle-based carrier cut its schedule by 10% through this month.