Plane Ticket Costs Are Expected to Take Off This Summer

By: Anneken Tappe · June 05, 2024 · Reading Time: 3 minutes

The sky’s the limit for airfare this summer, or that’s the worry. A combination of persistent inflation, delayed plane deliveries, and record travel demand are expected to keep up the pressure on airline ticket prices, according to the International Air Transport Association (IATA).

Cost Calculations

Several market forces are creating tailwinds for ticket prices.

For one, the cost per gallon of jet fuel, which accounts for roughly a third of all airline expenses, remained historically high at $2.83 in February. That’s down from its peak of more than $4 in June 2022, but a 4.8% increase from the previous month, according to the Bureau of Transportation Statistics . Decarbonization efforts have also left airlines with a limited supply of sought-after sustainable aviation fuel (SAF).

Then, last year was a record for pilot contract negotiations. Major airlines like Delta (DAL), American (AAL), United (UAL), and Southwest (LUV) all ratified double-digit pay increases for their pilots. These costs will likely be passed down to passengers.

Finally, pandemic-induced slowdowns in production and ongoing manufacturing delays from Boeing (BA) are still rippling through the industry. Forced to use older, less efficient planes, airlines are burning through pricey fuel faster, and may be unable to expand routes to meet demand.

Flight Frenzy

On top of these pricing pressures, the IATA predicts all-time high travel demand in 2024, with nearly 5 billion travelers across the globe expected to take to the air. The trade association also forecasts record airline revenue of nearly $1 trillion this year.

For travelers, this could mean looking out for deals even more than before. Planning in advance can also allow you time to set up a travel fund to pay for your dream vacation.

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