Jet fuel prices are close to an all-time high in the United States this week, forcing travelers to absorb climbing airfares just as the holiday travel season approaches. Major industry trackers and aviation executives point to surging fuel expenses as the primary driver behind ticket prices that travel experts describe as sitting at a 10-year high.
The average price of jet fuel nationwide reached $4.90 per gallon on Thursday, according to data from the tracking firm Argus. That figure marks the highest single-day average ever recorded by the firm, standing at more than twice what fuel cost a year ago. Airlines, which count fuel among their largest operating expenditures, have begun shifting those costs onto passengers.
“Airfares right now are at what we see as a 10-year high because of the high cost of jet fuel,” said Hayley Berg, lead economist at travel tech company Hopper. “Airlines have to pass on these super high jet fuel prices in the form of higher fares to consumers.”
Holiday Fares Climb Sharply as Travelers Face Higher Costs
Consumers looking to book upcoming holiday travel are encountering significantly larger bills than they did last season. Airfares for Thanksgiving are currently running about 30% higher than last year, while tickets for the Christmas holiday have increased by more than 20%, according to Berg.
Despite the sharp price increases, travel demand remains resilient. Berg noted in an interview with NPR that holiday travel tends to be exceptionally sticky, meaning consumers are unlikely to alter their traditional holiday trips despite the added expense.
Airlines echo that sentiment, reporting steady ticket sales. During an earnings call, Delta Air Lines CEO Ed Bastian stated that consumers have put up a “limited amount of resistance” and continue to view airfares as “reasonably affordable” even after the recent hikes.
The cost pressures extend beyond domestic flights. Michael O’Leary, CEO of European low-cost carrier Ryanair, warned during an appearance in Belgium that Europe could see airfares rise next year by 10, 15, maybe 20 percent over the next 12 months, marking what he described as the biggest increase in airfares in history in Europe.
While the U.S. benefits from greater domestic oil-producing and refining capacity than Europe, American carriers are still feeling the squeeze. Chris Sununu, head of the airline trade group Airlines for America, noted in an interview with CNBC that carriers are absorbing a substantial portion of the financial burden, but the sheer scale of the fuel spike makes passing some costs on to passengers unavoidable.
Travelers Book Earlier to Avoid Rising Prices
Faced with mounting expenses, travelers are adjusting their purchasing habits. Berg reports that consumers are shopping around more aggressively for deals and securing their reservations earlier than usual to avoid even steeper price jumps.
“Usually I am shouting from the rooftops in the middle of October, ‘Book your holiday travel by the end of this month, prices will not go down from here,'” Berg said. “But we actually saw an increase in customers booking holiday travel in September already.”
For some travelers at Baltimore/Washington International Airport, however, the price hikes have put flying out of reach entirely. Rachel Stern of Frederick, Maryland, said the cost of tickets for her and her children forced her to abandon air travel for an upcoming trip home to Chicago. “I’m gonna have to drive,” she said. “For me and my kids, just too much to get tickets.”
Others are resigning themselves to the higher costs out of necessity. Mary Haller of Bethany Beach, Delaware, experienced severe sticker shock when looking at economy tickets for a planned trip to Europe, noting that prices jumped significantly in just a two-week span. Despite the financial jolt, she purchased the tickets, remarking that she feels sympathy for those who lack the means to absorb the extra expenses.
