Checkpoint travel data released by the Transportation Security Administration shows that leisure travel has recovered after a new wave of the epidemic, with the number of passengers in late March only about 8% less than the same period in 2019.
As travelers plan their travel for the upcoming spring/summer travel season, airfares will gradually rise due to multiple factors such as seasonal demand growth, inflation and soaring oil prices. At the same time, both U.S. and foreign airlines are encouraging a return to international travel and expanding into new routes.
Passengers' enthusiasm for travel continues to inspire airline innovation, and the entire aviation industry is also facing challenges brought about by the tensions between Russia and Ukraine. How will the development of the aviation industry affect the next trip of passengers?
01
Airfare prices have risen
One sign of recovery in U.S. tourism is rising ticket prices, where airlines can charge more for those willing to fly. According to the consumer price index, airfare prices rose 12% year-on-year in February this year.
Ticket prices reflect more competition for seats than fuel prices. According to the Argus US Fuel Index, the price of fuel was $2.71/gallon on Feb. 24, peaking at $4.11/gallon in early March and currently about $4/gallon.
Adit Damodaran, an economist at travel tech company Hopper, said fuel accounts for about 30 percent of airline operating costs, with fuel prices rising by 10 percent and airline operating costs rising 3 percent, while airlines tend to shift costs by raising ticket prices. Hopper's search results show that the average U.S. domestic airfare is $330, 7 percent higher than in 2019.
Delta Air Lines President Glen Hauenstein recently said ticket prices could rise in the second quarter due to strong passenger demand, though U.S. airlines have yet to charge a fuel surcharge.
For now, the increase in ticket prices is largely due to the rise in passenger demand in the post-Opmi-Kron period.
Steve Hafner, CEO of Booking Group's metasearch brand Kayak, said travel costs are likely to rise this spring and summer because of rising demand, with ticket prices for domestic travel in the U.S. up 21 percent during spring break compared to 2019. Las Vegas, Orlando, Miami, Los Angeles and Phoenix became the most popular destinations.
For summer travel, Kayak's search data shows that prices for domestic flights have increased by 28% compared to 2019 and prices for international flights by 6%.
Scott Keyes, founder of Scott's Cheap Flights, a cheap airline booking site, said that while ticket prices are rising, there are also plenty of low-cost flights. Since 2015, fares have been gradually declining, competition from low-cost airlines has intensified, and airlines have begun to raise ancillary fees, sell miles to credit card companies, and increase business and first class fees to keep economy class low.
While prices can fluctuate from day to day, some cost-saving methods still apply, such as the ability to buy tickets 1-3 months in advance, traveling during off-season and off-peak periods, and flexible choice of dates and airports.
02
Increase in international flights
Long before Russian troops entered Ukraine, veteran U.S. full-service airlines expected 2022 to be the year of recovery for international flights. As travel restrictions remain stringent in much of Asia, most U.S. airlines fly mostly internationally to Europe.
Keyes said airlines are looking forward to a recovery in summer travel demand, and they are increasing capacity. Flight capacity from the U.S. to London increased by 25% this year compared to the summer of 2019.
United embarked on the largest transatlantic expansion in history, including Amman in Jordan, Bergen in Norway, Palma de Palma and Tenerife in Spain, and Ponta Delgada in Portugal. By the summer, United will add flights to Berlin, Dublin, Milan, Munich and Rome, and restart seven routes that have been grounded during the pandemic, including Frankfurt, Nice and Zurich.
Delta plans to operate about twice as many transatlantic flights this summer as it did in the same period last year. The new route from Boston will reach Athens and Tel Aviv.
Flight data analytics company Air Service One said that compared with 2019, U.S. airlines will add more than 70 new routes to Europe.
03
Increase in low-cost flights
In addition to U.S. airlines, there are a growing number of low-cost airlines and even foreign airlines competing for the market, offering new routes and better fares.
Most analysts believe that the cost structure of transatlantic routes determines that low-cost airlines will not make money on these routes, such as Norwegian Airlines stopped operating transatlantic routes during the epidemic and Icelandic low-cost carrier Wow Air went bankrupt in 2019.
However, Iceland's new airline Play has succeeded Wow Air with flights to more than 20 destinations in Europe. By the summer, Play will also operate at Boston, Baltimore and New York Stewart International Airports, with additional expansion to Orlando in September.
Canadian ultra-low-cost airlines Swoop and Flair are also expanding into the U.S. market.
Swoop, a subsidiary of WestJet, Canada's second-largest airline, will open flights to Chicago, Los Angeles, Nashville, New York and San Francisco this summer, bringing it to 11 U.S. destinations with one-way fares starting at $99 CAD (excluding taxes).
Headquartered in Edmonton, Flair added 17 new cross-border routes last December, connecting six U.S. destinations, including Las Vegas, Palm Springs, Phoenix and Orlando. In April, one-way tickets between New York JFK International Airport and Toronto start at $100 CAD, plus a surcharge of around C$68 CAD.
Brett Snyder, founder of aviation blog Cranky Flier and travel planning service Cranky Concierge, said Flair is the first ultra-low-cost airline from Canada and will have good momentum.
The disadvantage of these airlines and other ultra-low-cost carriers is that they fly less frequently, are prone to serious no-shows when there are weather or mechanical problems, and may have to wait for days for the next flight, and they have not cooperated with large airlines to pick up these stranded passengers.
Last year, two new smaller U.S. carriers, Breeze and Avelo, were formed, which are currently optimizing operations.
Avelo launched point-to-point flights on the West Coast from Burbank, California, and recently added an East Coast base in New Haven, Connecticut, connecting to several destinations in Florida, as far as Chicago. Flight data for April showed that one-way flights between New Haven and Tampa, Florida, start at $69, cost $6 for seats, $40 for carry-on baggage and $35 for checked baggage.
Breeze recently added 10 destinations, mainly to Florida and several cities in the southeast, while adding direct flights to Las Vegas. One-way tickets from Syracuse, New York to Las Vegas in June start at $159, excluding seating and carry-on baggage fees.
American Express Launched its sub-brand Aha! last year, express plans to use Reno, Nevada, as a hub to provide services to nearly 10 cities. The airline also plans to package tickets with hotel accommodation and launch holiday packages.
The most recent search for round-trip fares from Eugene, Oregon to Reno cost $109, with a minimum charge of $10 for a one-way seat and luggage fees starting at $30.
04
"Subscription Flights"
Low-cost airlines have been working on pricing, and Alaska Airlines has launched a new subscription-based service called Flight Pass, similar to the domestic "free fly".
For California travelers, the Free Fly package starts at $49 per month, and annual members get 6 round-trip flights per year, which can be booked two weeks or more before departure, and the average cost of each round-trip flight is $100, which is equivalent to a 20% discount. For travelers looking for more flexibility, you can opt for Flight Pass Pro, which starts at $199 per month and can be booked at any time, costing around $400 per round trip.
The service covers flights to 13 destinations in California, as well as Reno, Las Vegas and Phoenix.
Alex Corey, an executive in Alaska Airlines' business development and products division, said the package was launched in mid-February with remarkable results, with nearly a third of subscribers having not flown on the company in the past three years.
As early as June 2020, China Eastern Airlines launched the first "Weekend Free Fly" product in the field of civil aviation in China, followed by Huaxia Airlines, Hainan Airlines, Auspicious, Xiangpeng, Spring and Autumn, China United Airlines, Sichuan Airlines, China Southern Airlines, Shanhang Airlines and other airlines have launched similar products. Although travelers have mixed reviews of such products, their popularity has also lasted for a full year. Until September last year, Qunar was still promoting the National Day activities, and the 66 yuan free fly product could choose any route, and it was valid until the Spring Festival this year.
Resources:
1. Rising fares, low-cost airlines: navigating the new reality in the sky. (New York Times)
2. United will expand its largest transatlantic route in history. (Global Travel News)
3. "Fly freely" detonates the air travel market, who is the next entrant? (Global Travel News)
4. Can many airlines launch "Fly Free on the Weekend"? (Global Travel News)
5. Qunar pushes the strongest version of "Fly Freely": 66 yuan optional route valid until next year's Spring Festival. (Global Travel News)