Summer Airfare Analysis: Passengers Will Pay More
Passengers who have yet to book airline tickets for summer travel may be in for a bit of a surprise because prices are more expensive than last year. Since January of 2011 to May 2012, the cheapest airfares have increased a whopping 18% percent – fortunately, it's not quite that bad for many summer vacation flyers.
Listen as airfare analyst Rick Seaney explains the difference between "bad deals" and "stinking bad deals".
Summer Flights 2012: 8% Higher than Last Year
As airfare analyst Rick Seaney calculates it, "Airline ticket prices for this summer are now averaging about 8 percent higher than the same time last year – meaning for shoppers it's less a matter of finding cheap flights than finding the best of the not-so-great deals." He added, "I think pricing on certain nonstop routes could go a little crazy this summer."
Family of Four will Pay $100 More for Average Airfare
According to Seaney, a family of four can expect to pay on average almost $100 more for airfare to popular destinations such as Orlando and Los Angeles if they procrastinate on purchasing tickets. However, the analyst doesn't see prices rising too much higher or demand will slack off. "That's how airlines will know when they've reached the breaking point on prices," he said, "because people will stay home."
[Keep reading for more info – including great tips – just below the searchbox]
Top Reasons for Higher Summer Airfare Prices
This year, several factors have combined to create perfect conditions for higher prices.
- Seasonal Factors
The busiest travel seasons of the year are the priciest. These include the summer vacation months and popular holiday periods like Thanksgiving. Airlines know demand is strong and they also know travelers want to maximize vacation time by flying on Fridays and Sundays, and charge whatever the traffic will bear.
- The Price of Oil
One of the biggest factors contributing to the rising price of airline tickets is oil, which has been stubbornly hovering around $100 per barrel with a respite the past week. And while that translates into grimaces at the pump as prices could climb to $4 a gallon and beyond, it's even worse for jet fuel prices.
- Election Year Politics
As analyst Seaney points out, "2012 is shaping up to be anything but typical for airfare prices and a lot of that can be traced to presidential election year politics, which has the potential to send fuel in any direction especially when you add unrest in the Middle East to the mix." He added, "The impact of oil on ticket prices is huge."
- Airfare Hikes
Seaney notes that since January of 2011, airlines have attempted to raise airfare prices 28 times. A dozen of those attempts were successful, and he would not be surprised by another hike attempt or two before summer gets in full swing. Plus, steady demand in the face of airline capacity cuts also affects pricing. "Keeping airfare prices high wouldn't be possible without the serious, ongoing capacity-cutting by airlines in recent years," said Seaney, adding, "Carriers are trying to drop every empty seat to more perfectly align with demand which creates a recipe for fuller flights, higher ticket prices and higher airline revenues."
Seaney continued, "Most airlines lost money in the first quarter of 2012 and they will use all the weapons at their disposal, be it capacity-cutting, airfare hikes or seasonal pricing, to insure bottom-line improvement as the year goes on."
How to Save on Summer Airfare
Seaney advises travelers to shop early and shop carefully to avoid paying a penny more than they have to. Some of his favorite tips, strategies and guidelines:
What to Pay
Flight less than 500 miles (about 1 hour flight time)
- Best deals: Under $100 round-trip
- What to shoot for: Anything under $150 round-trip
Flights of 500 – 1,000 miles (about 2 hours flight time)
- Best deals: Under $160 round-trip
- What to shoot for: Anything under $210 round-trip
Flights of 1,000 – 1,500 miles or more (about 3 hours flight time)
- Best deals: Under $200 round-trip
- What to shoot for: Anything under $280 round-trip
Flights of 1,500 miles or more (over 3 hours flight time)
- Best deals: Under $240 round-trip
- What to shoot for: Anything under $340 round-trip
Six Cheaper Summer Vacation Destinations
Where you travel matters. These six cities and regions are among the relative bargain destinations of the summer.
- Florida panhandle region
- Los Angeles area
- Washington, D.C.
8 Tips for Buying Summer Airline Tickets
1. Shop on Tuesday afternoons: Generally, an airline will launch a sale either late Monday night or early on Tuesday and the other airlines match to stay competitive. This matching process is generally completed by Tuesday afternoon about 3 p.m. eastern time.
2. Compare prices to nearby airports: A big hub is usually cheaper than a smaller regional airport. The additional drive-time to or from a farther airport can be worth it.
3. Be Flexible: Overnight or red-eye flights and flights at dawn are usually cheaper, as are connecting flights. The cheapest days to fly are most often Tuesday, Wednesday and Saturday.
4. Use Airfare Alerts: FareCompare has airfare alerts which let consumers know when prices drop. The key to following an alert to a successful conclusion is a lightning-fast response since such deals can and do disappear quickly.
5. Social Media Deals: Airlines have offered deals on Groupon, LivingSocial and Facebook. There are no guarantees but if an airline is trying to unload unpopular seats, it could be a shopper's lucky day.
6. Vacation Package Deals: These can be especially useful for the procrastinator since airfares and hotel prices in package deals are generally pre-negotiated set-prices. They may not be the best deals for early-birds but they can seem cheap compared to last-minutes prices.
7. Use Your Miles: Summer vacation can be a great time to use up miles in rewards programs. A good rule of thumb: if airfare costs somewhere north of $400 or $500 round-trip, pay for it with miles.
8. Pack Light: Use a carry-on bag. Lighten its load by buying toiletries at your destination. Exception: JetBlue and Southwest offer free checked-bags, while both Allegiant and Spirit now charge for carry-on bags. If you wait to pay for your carry-on at a Spirit airport gate, you'll get socked with a $100 charge