Business
Holiday Flyers Face Steep Fare Hikes as Jet Fuel Nears U.S. Record
U.S. jet fuel topped $4.75 a gallon this week, nearly twice its price a year ago, pushing holiday airfares to decade highs. Thanksgiving tickets are up about 30% year over year, while Christmas fares have climbed more than 20%.
Holiday air travel is getting markedly more expensive as jet fuel prices approach a U.S. record, putting pressure on families and airlines alike.
The average U.S. price of jet fuel exceeded $4.75 per gallon this week, according to fuel tracker Argus. That is close to an all-time high and nearly double the level a year ago. Fuel is one of airlines’ largest expenses, and carriers are passing some of the added cost on to passengers.
Thanksgiving airfares are about 30% higher than last year, and Christmas fares are up more than 20%, said Hayley Berg, lead economist at travel company Hopper. She described current fares as a 10-year high.
The increases are already changing travel plans. Rachel Stern, of Frederick, Maryland, said she plans to drive to Chicago with her children rather than pay for plane tickets. Herb and Latasha Williams, who flew from Dallas to Baltimore this week, found their tickets cost hundreds of dollars more than they expected. Latasha Williams said a warm-weather holiday trip might have to wait until next year.
Other travelers say they will pay more despite the sticker shock. Mary Haller, of Bethany Beach, Delaware, said economy tickets for her planned trip to Europe had risen significantly in just two weeks, but she still intends to buy them.
Airlines say demand remains steady. Delta Air Lines CEO Ed Bastian said on an earnings call this month that customers have shown only “a limited amount of resistance” to higher fares and still consider air travel “reasonably affordable.”
Chris Sununu, head of the Airlines for America trade group, said carriers are absorbing most of the fuel-cost increase, but some of it is reaching customers. He cited holiday fare increases of 20% to 30%.
Travelers are searching more widely for deals and booking earlier, Berg said. She noted that holiday bookings rose in September, earlier than the usual rush to buy tickets. For consumers who can adjust their plans, driving or shifting travel dates may offer an alternative; those committed to traditional holiday trips may have fewer ways to avoid the higher bill.
The pressure could continue beyond the holiday season. Ryanair CEO Michael O’Leary said this week that European airfares could rise 10% to 20% over the next year. The U.S. has more oil production and refining capacity than Europe, but higher fuel costs are still weighing on American carriers.