Why the Price of Airline Tickets Continues to Rise

This will not surprise frequent travelers, but if you haven’t flown in a while, prepare for some sticker shock: the cost of airline tickets is on the rise. However, there are still some airfare shopping strategies to help travelers find cheap flights, and they are listed at the end.

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Airfare Prices Rise in 2011, 2012

Average airfare prices have been heading north as follows:

  • 2011: Prices rose about 17%
  • 2012: Prices are up about 4% since Jan. 1

So far this year, there have been four airfare hike attempts – two of which were successful. There will be more attempts and we expect prices to rise even higher though not to levels where shoppers refuse to buy.

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Four Biggest Factors Fueling Airfare Price Hikes

To a great extent, the price of oil is fueling the recent airfare hikes but there are other factors at work. Here’s the round-up:

Rising fuel costs: Airline ticket prices are joined at the hip with the price of oil since jet fuel is such a significant cost for carriers. As of this writing, the price of oil per barrel was over $105 and continues to rise.

Seasonal price fluctuations: As usual this time of year, airfare prices are increasing in anticipation of two upcoming strong-demand vacation seasons: spring break and the summer travel period, when prices almost always jump sharply.

Less competition: Recent airline mergers including Southwest/AirTran, United/Continental – and going back to 2008, Delta/Northwest – mean less competition on certain routes and less competition generally means higher ticket prices for flyers.

Capacity cutting: For the past few years, airlines have focused on filling up every seat on the plane to save money/generate revenue – especially those often-empty middle seats – so they have been cutting flights on unpopular routes (and sometimes dropping them altogether) while beefing up the number of seats to larger hub cities. In fact, according to a new forecast from the Federal Aviation Administration (FAA), airfares will likely continue to rise or at least stay high throughout the decade “as passenger travel grows but airline capacity shrinks.”

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Tried and True Methods to Save on Airfare

The best defense against higher prices for air travelers is to shop smart, and here are four ways to do that:

Shop on Tuesdays

Specifically, shop Tuesday afternoon at 3 p.m. eastern time, after airfare sales have been launched and competitors have finished matching these lower prices.

Be flexible on travel dates

Many sale prices are good for flights on Tuesdays and Wednesday only. Other days will usually cost more while the most expensive days to fly domestically are typically Friday and Sunday.

Be flexible on flight times and connections

Foregoing a nonstop flight can save money. So can flying at less popular times of day including dawn, mid-day and late evening.

Be flexible on airports

Fly to-and-from the biggest airport near destination and departure cities, particularly an airline hub; it may involve a longer drive, but it will almost always save money.


Published: March 8, 2012