By: John Rauser - Farecast Fareologist
If you’ve read any press about the travel industry, you know that things are pretty rough out there. The carriers that haven’t gone out of business are suffering weakening demand and fuel prices that have nearly doubled in the last year. Naturally, they are responding with both higher fares and reduced capacity.
How far have airfares risen? The chart below shows the history of the year-over-year increase in cheapest available airfare for domestic trips departing in the following 90 days.
You can see that in the last few days, fares for upcoming flights are up about 20% from 2007 levels. The year-over-year gap has been widening since March, as more and more summer itineraries have been included in the 90 day window.
Summer fares are always higher than other times of the year, but they are especially high this year. So far, the average July departure has cost more than $300 this year, where last year it was below $260.
Hawaii
The news is particularly grim for travel to Hawaii. The demise of both Aloha and ATA Airlines cut capacity deeply and fares jumped as a result. The chart below shows the same data as the one above, but includes only trips from the US mainland to Hawaii.
In the week that ATA collapsed, airfares jumped a staggering 29%. The year over year increase has been steadily declining since then, but it’s still uncomfortably high at 25%, especially when that 25% increase comes on what were already some of the most expensive trips within US borders.
How To Cope
If you have no flexibility in your travel dates or destination, you may simply be stuck paying the current high prices. However, if fares at their current levels are a deal-breaker, but you have some flexibility, prospecting for last minute deals may be your best bet.
My strategy would be to keep a handful of destinations in mind, and absolutely avoid Sunday returns. Set up alerts, or check prices regularly, particularly for “last minute” trips departing in the upcoming few weeks.
High prices and anemic demand just might lead to price drops, especially for flights on the least popular days of the week: Tuesday and Wednesday. If you keep an eye out and are willing to accept a layover or less desirable flight times, you may yet be able to find a ticket at a price you can afford.