Airline passengers can expect ticket prices to be 7% to 18% higher this holiday season than last year, as an economic recovery — however modest — spurs growing demand for air travel.
Travelers can also look forward to more crowded flights: The airlines have added few new planes or routes in the last several years.
“I expect prices to be quite high compared to the last couple years, as demand is strong and supply is weak,” said Rick Seaney, chief executive of the travel website FareCompare.
Already, airlines are packing more passengers per plane, with the nation’s top carriers recording 86.3% of all seats filled in June — the highest rate in 10 years, according to the U.S. Bureau of Transportation Statistics.
About 41 million Americans are expected to fly during the Thanksgiving and Christmas holiday season, making it one of the busiest travel seasons of the year.
Passengers took advantage of bargains last year, when airlines dropped prices to the lowest levels in decades to entice recession-battered travelers back into the air. But now, travel experts say, demand has begun to pick up, partly a result of pent-up demand and growing optimism about the economy.
“Travel demand for the peak travel days is increasing, driving prices higher as availability diminishes,” said Jack E. Richards, president and chief executive of Pleasant Holidays, a travel agency in Westlake Village.
For example, a nonstop round-trip ticket from Los Angeles to New York departing the day before Thanksgiving and returning the following Sunday was running between $641 and $881 on the major airlines. According to a spokesman for the travel website Expedia, those prices were about 20% higher than last year.
For travelers hoping to relax in the sun, a round-trip ticket from Los Angeles to Cancun, Mexico — departing the Wednesday before Christmas and returning the Monday after — cost about $561 to $939. Those prices were up about 31%, the Expedia spokesman said.
The prices are so high that Marilyn Fils, a frequent traveler from Tarzana, canceled plans to meet her daughter in New York for Christmas.
“I expected somewhat higher prices, that’s pretty typical during the holidays, but I was surprised at just how much everything from airlines to hotels had increased,” Fils said.
Some experts held out hope that there may still be bargains ahead. If travelers balk at the higher prices, they suggested, the airlines may offer last-minute discounts to fill empty seats.
Jay Johnson, owner of Coastline Travel Advisors in Garden Grove, said travelers who haven’t yet booked a flight should consider waiting awhile because he expects airlines to offer bargain prices if demand drops.
Seats will also be cheaper, Johnson said, if you are willing to travel several days before Thanksgiving or on Christmas Eve.
“At this point, you should either wait or fly on the actual holiday,” he said.
Another tip for avoiding higher rates is to book a flight during off-peak hours, such as early in the morning, or fly to a smaller, outlying airport, said George Hobica, founder of the travel website Airfarewatchdog.
“People should not take the first offer they see,” he said. “Check the prices several times a day and consider taking alternate airports.”
The higher prices signal bad news for travelers but more good news for the airline industry, which has only recently begun to show signs of recovering from the slump in demand after the Sept. 11, 2001, terrorist attacks and during the global recession.
The U.S. commercial airline industry lost an estimated $58 billion in net income from 2001 to 2009, according to the Air Transport Assn., a trade group for the nation’s largest airlines.
But times seem to be improving for airlines. The industry reported last month that passenger revenue rose 17% in August, marking the eighth consecutive month of growth.
Wall Street has taken note of the improvement. An index of 12 airline stocks is up 34% so far this year, compared with 5% for the Standard & Poor’s 500 index.
“Spending on travel remains well above last year’s depressed levels,” said James May, president of the Air Transport Assn.
The fare increases are in sharp contrast to the 2009 holiday season, when the recession dragged prices to the lowest levels in decades.
For the holiday season, the exact price increase depends on which numbers you use and how you crunch them.
FareCompare’s Seaney compared the cheapest flights during the Thanksgiving and Christmas holidays with similar flights last year and found prices had risen at least 18%.
Genevieve Shaw Brown, a senior editor at Travelocity, looked at the prices of flights to and from the country’s 100 most popular destinations in the days before and after Thanksgiving and Christmas and said prices were up about 7% from last year.
But when compared with the higher fares of 2008, holiday airline prices this year are down about 4%, Shaw Brown said.
Most airlines declined to discuss future fares, but American Airlines spokesman Tim Smith said: “It’s all about supply and demand. When people want to travel, it’s going to be more expensive.”
The good news for travelers is that hotel rates should stay relatively stable, partly because hotel managers still have an abundant supply of rooms to offer.
In Los Angeles, the average hotel room rate was 4% higher in August than a year earlier, according to Colliers PKF Consulting USA, a hotel industry consulting firm.
“Rates will be up this year over last year for the holiday season but not significantly,” said Bruce Baltin, senior vice president of PKF Consulting.