While the Omicron variant derailed many people’s travel plans this winter, with experts saying that the COVID-19 variant might soon peak in the U.S., travelers are already looking to plan their 2022 getaways.
Or at least they should be. That’s because, like the cost of virtually everything else right now, airfares are about to soar again. Yes, inflation is a culprit here, but there are more elements at play.
According to travel booking app Hopper’s Consumer Airfare Index, domestic airfare will increase 7% monthly through June, reaching 2019 levels by April 2022. By comparison, the consumer price index (CPI) rose 7% over the past year, reflecting the fastest annual increase in the inflation rate in 40 years.
“The sharp rise in airfare also takes into account that airfares are unusually cheap right now (even accounting for seasonality) due to lower demand amidst the Omicron variant,” says Adit Damodaran, an economist at Hopper.
Damodaran cites increased demand, seasonal effects, and higher jet fuel prices as contributing factors to higher airfares coming soon. The price of jet fuel, according to the U.S. Energy Information Administration, is currently $2.56 per gallon—the highest it’s been since 2014. “Over the course of 2021, we saw a 60% increase in jet fuel prices from $1.34 per gallon at the start of the year. We expect higher jet fuel prices to contribute to higher consumer airfare for 2022.”
The average domestic roundtrip airfare (regardless of transit points) in January 2022 is relatively low—almost record low—at just $234, while international airfare is also at historical lows at just $649 roundtrip.
According to Scott’s Cheap Flights, there are currently fares as low as $376 roundtrip to Paris and $486 to the Azores from U.S. departure points, and the travel site expects those kinds of details to continue, at least during winter, despite a rise in average airfare. And as noted in the site’s State of Cheap Flights 2022 report, there has been a boom in last-minute deals.
“Airfare is the single most volatile purchase most Americans make, and so while many people will overpay for flights this year (and thus bump up average airfare), that doesn’t mean cheap flights will disappear,” says Scott Keyes, founder of Scott’s Cheap Flights.
Keyes says there are two things we know to be true. First, he explains, it’s quite likely that average fares will be more expensive in 2022 than in 2021. Second, that has little if any bearing on what you can expect to pay for your next flight, for one simple reason: You can’t book average fares—you can only book available fares.
But based on current search levels, Hopper expects the domestic average to top out at $315 by June 2022. International airfares might not grow as fast, perhaps because of travel restrictions including frequent COVID tests, quarantine mandates, and more. But Hopper predicts international airfare rates will grow by at least 5% each month for the next six months.
“A good rule of thumb is to book no later than three weeks in advance of your intended departure date, and ideally even earlier (four to six weeks) for international trips,” Damodaran advises. “Last-minute airfare can increase significantly, rising on average 25% two weeks out and another 30% in the final week. Notably, this is not the same for hotels; in large markets with lots of options (i.e., big cities), you can find great deals last-minute as hotels try to fill rooms.”
For domestic U.S. travel, Presidents Day weekend (Feb. 18 to 21) and mid-March are seeing higher than expected domestic search volume, according to Hopper, suggesting a rough estimate for when travelers are expecting the situation with the Omicron variant to improve domestically. For international destinations, travelers are generally eyeing mid-March. Canada was one of the only international regions seeing earlier demand among Americans for February.
The recent surge of cancellations and delays—which could be worsened by the 5G rollout kerfuffle—is further contributing to changing how travelers book plane tickets. Since the beginning of the pandemic in 2020, airlines immediately jumped to waiving change and cancellation fees amid pandemic lockdowns and travel bans. Some carriers have brought back those penalties in some or full capacity, while others are banking on flexible rates as a marketing advantage. (Then there’s Southwest, which never charged those fees to begin with, only fare differences.)
Hopper says it has been seeing increased interest in its flexible booking options. Currently, 43% of Hopper app users are booking plane tickets with at least one flexible fare option, up from 33% pre-Omicron. Hopper’s options to cancel or change tickets for any reason—paid add-ons that are more like preventative measures than traditional travel insurance—are being purchased with 22% of all bookings (up 6% from November 2021), and the flight disruption guarantee is purchased with 21% of all bookings (up 4% from November).
“We’ve seen in our data that travelers want flexibility when booking their trip,” Damodaran says. “This shows that there is strong demand among travelers to book with flexible cancellation policies, but we anticipate airlines may roll back these offerings as demand improves and stabilizes.”
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