Why are airline prices so high right now: the underlying reasons

Flying is much more expensive! Understand what's happening and what's behind the rise in airline ticket prices.


by José Gonçalo

Published on 06/30/2022

Find out why airfare is costing more this year

Traveler holding travel bag, passport and air ticket.
Ticket prices are higher than ever. Understand what’s going on. Source: Pixabay

In fact, anyone who travels knows that airline ticket prices were never necessarily cheap. However, in recent months, travelers are complaining even more about airfare prices. After all, why are airline prices so high?

We spoke with subject matter experts to understand what is behind this increase. Now, let’s tell you everything. In fact, anyone who has tried to buy airline tickets knows that prices are highly volatile.

Basically, it’s like you’re trying to buy shares on the stock market. Every minute, prices go up or down unpredictably. I myself have already lost the chance to buy tickets at very low prices just by pressing the F5 button on my computer.

Currently, airline ticket prices continue to fluctuate, but tend to reach higher values. According to the Adobe Digital Economy Index, compared to March 2019, travelers in March 2022 had a 28% higher overall spend buying airline tickets.

When comparing these same periods, ticket sales are not enough to explain the increase. According to the company, sales in that month of 2022 were only 12% higher than in the same period in 2019.

In addition, last year, the consumer price index for airline tickets indicated a 25% increase in prices. Furthermore, according to the Bureau of Labor Statistics, those who traveled in April this year paid 18.6% more than in the previous month.

So the question remains: why are airline prices so high?

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Did the Covid-19 pandemic affect flight prices?

Almost empty airport lounge.
The pandemic still influences the price of air tickets. Understand how this is possible. Source: Pixabay

If you thought of the pandemic as an answer to why airline prices are going up, you’re right. However, only in part. In fact, there are other factors that are currently “dragging” ticket prices up.

However, first, it is important to understand how COVID-19 has contributed to the current scenario. First of all, it is important to understand that ticket prices are also regulated by the law of supply and demand.

So during the lockdown, when hardly anyone was looking for tickets and those were in short supply, the price dropped significantly. When airlines reopened, demand soared and so did prices.

Apparently, people weren’t sure when they would be able to travel again. So, at the first opportunity, they decided to take advantage of it. Another factor that explains the current upward movement is the price of fuel.

As aircraft fuel is also derived from petroleum, any change in the price of a barrel will be reflected in the price of tickets. So the Russian-Ukrainian conflict has its “part of the blame” if you can’t afford your travels.

A third factor that can weigh on your ticket price is employee costs. Labor charges are higher in the post-pandemic for most sectors. In aviation, this is also a reality. Indeed, maintaining teams of pilots and flight attendants is not just more expensive.

In addition, it is increasingly difficult to find these professionals in the market.

4 reasons why current airline prices are so high

Photo taken inside an airplane (Why are airline prices so high).
Learn about 4 other factors that influence the price of airline tickets. Source: Pixabay

In fact, the above three factors manage to explain “Why are airline prices so high”. However, there are other factors that also contribute to the current pricing situation. In fact, the only difference is that they are not part of the current situation.

In this way, they are always influencing the prices of airline tickets. Below is a list of the main ones:

Business travelers “make” tickets more expensive

As a tourist, you usually do a lot of research before buying tickets. However, most entrepreneurs don’t do the same. In fact, this audience is only looking for dates and flights with fewer stops. That way, the price for them is not that important.

For this reason, airlines tend to charge more for airlines with users who have this profile. Thus, travel between capitals or “business cities” tends to be always more expensive, even for tourists.

Competition between airlines

Think fast: when several companies offer a similar service, how do you decide which company you will be a customer of? Many of us would compare prices and choose the one that charged the least.

Thus, when there are several companies operating on the same line, prices tend to be lower. This is the most efficient way for companies to compete in an open market: offering lower prices.

However, the converse is also true. The fewer companies that offer the service, the higher the ticket prices tend to be.

Seasonality matters too

Only those who have tried to buy a plane ticket on Christmas Eve or the 4th of July holiday know how much seasonality matters. In fact, there are those “peak seasons”.

Typically these are school holidays or recess periods at the beginning/end of the year. At these times, the demand for travel is greater. So companies raise their prices to make a profit that makes them more comfortable in “down periods”.

Advance purchase and choice of times also matter

You already know that buying tickets “at the last minute” makes you pay more. However, anticipating the purchase too much can also be negative. The idea is that you buy your ticket 3 to 5 months in advance.

That way, you can count on the “cautionary bonus”. Amazingly, the day and time of your flight also influence the price of your trip. However, there is no general “economy hours” rule that applies to all agencies.

To benefit from this fact, what you can do is search on websites that specialize in cheap travel purchases.

The increase in gasoline is a backdrop for the increase in ticket prices. By clicking on the link below, you will be able to understand why your gasoline is so expensive and how long will prices remain so high.

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About the author

José Gonçalo

I started reading about finance only to find better options than savings. Since then, I have never stopped studying finance, and I believe that writing about it is the best way to help individuals feel fulfilled and have a healthy financial life. Today, I balance finance and medical school studies.

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