Filled your gas tank recently? You probably noticed an uptick in prices and may have attributed it to the recent attack on Saudi oil facilities. Then, if you’re a worrier, you said, “If I’m paying this much at the pump, can airfares be far behind?”
Fliers, don’t panic about this. There are other reasons to panic about holiday airfares. Some of them have to do with your mother, grandmother, father or sister, depending on whom you love most. Here’s what going on.
Recent jump in prices
The most recent jump in gas prices, usually an indicator of possible airfare increases or decreases, is related not to Saudi Arabia but production issues in California refineries.
Take a look at the current average in Los Angeles/Long Beach, according to AAA Gas Prices on Monday: $4.12. Prices did increase after the Sept. 14 attack on the Saudi facility, but they settled back down once repairs were made.
The current national average suggests this is a California issue. Nationwide, the price is $2.64 a gallon.
Is it time to panic about holiday fares that are worse than usual? No, because …
Airfare increases take time
It takes time for fuel increases to cycle into the airfare flow. “The short answer is months — maybe four to six months — before we see a noticeable change in airfares, if the airlines believe the higher fuel prices are more than fleeting,” Seth Kaplan, an airline and transportation analyst, said in a Sept. 18 email.
“Airlines can’t really adjust prices per se based on fuel price movements. … What they do control is the supply of seats in the marketplace.”
But airlines can’t just willy-nilly cut supply, Kaplan said. “Too disruptive.”
“Once you get about four to six months out, you’re looking at flights that don’t have many people booked on them, where an airline can take a few flights out of the schedule and just move the few booked passengers onto other flights, and that’s where you are seeing meaningful fare increases,” he said.
By our count, four months from Sept. 18 is mid-January.
Thanks to basic economy, fares have been reasonable this year, and basic economy continues to gain ground. Once U.S. fliers caught on that they could swap comfort for savings, they’ve warmed to no-frills fares.
“There is such fierce competition for the airlines to attract customers [that] basic economy tickets are priced very aggressively, which will always attract people to travel,” said Tom Spagnola, senior vice president of supplier relations for CheapOair. “Even if there were a slight fare increase in ticket prices, the fares are still very affordable.”
One of the most recent entrants in the basic fare rodeo is Hawaiian Airlines, which on Oct. 21 will roll out its long-planned reduced-rate tickets.
If you look at the Honolulu market from LAX, you’ll find round-trip fares for Nov. 6-13 (both Wednesdays, because those tend to be cheaper) of $358 on several carriers; basic on Hawaiian is $20 more.
Consider also that Southwest is now flying to Hawaii, which makes the field more crowded. (It showed no round-trip availability for those dates and, for now, Southwest flights from LAX stop once before heading to Honolulu, which lengthens the trip to more than nine hours in some cases.)
Given that competition for passengers has increased and has kept a lid on fares, is it time to panic about holiday fares? A bit, because ...
Airline growth has slowed
In an email Monday, Kaplan, the airline analyst, noted that growth in the number of seats this year should have been on par with 2018, a good year. But then came the 737 Max grounding, which slowed things.
“The impact of slower growth, in the context of what seems to be still-robust travel demand, is higher airfares, not dramatically higher because of 4% versus 6% growth, but every bit matters during a high-demand travel period,” Kaplan said. Your “fare might be cheaper. But it will not be cheap. Of that, I am certain.”
Should you go into raving lunatic mode now? Maybe, because ...
Airlines, you’ve made flying (at least price-wise) so easy to love that record numbers of us want to do it, especially at the holidays.
Airline traffic continues to set records, Spagnola said, adding, “The airlines are expecting yet another year of record numbers of passengers during the Thanksgiving and Christmas/New Year’s travel period.
“Demand is high so flights will be sold out for the peak travel days within the week of the actual holiday.
“I would highly suggest to book flights as soon as possible for the holidays,” he said. “There are no signs of any slowdown of people looking to buy airline tickets for the remainder of 2019 and into early 2020.”
Spagnola is already looking for holiday fares for his family. “What I am seeing is flights being sold out, so this is going to limit which days/times I can travel. For people who are not flexible, this will impact their ability to keep their prices low if they are undecided on traveling.”
Bottom line, he said: “Don’t wait. Buy now.”
So how jittery should we be? Based on a quick price comparison on a single route, pretty jittery.
Let’s say you want to fly from LAX to Washington, D.C., (any airport) for Thanksgiving. You want to leave Nov. 27 (Wednesday) and return Dec. 1 (Sunday). You do not want to spend your kids’ inheritance so you’re looking for a basic economy fare.
In reviewing fares Monday, I found basic economy for those dates was mostly sold out on United, American and Delta. Southwest, which doesn’t have basic, had little availability in its “Wanna Get Away” fares, its lowest priced tickets. The most affordable ticket was United’s round-trip at $642.
So thanks a lot Mom, Dad, Granny, Sissy or whoever is waiting for you at the other end. Our apparently insatiable desire for low fares and our ability to find them most of the time made us believe we’d find a good fare. And most of the time we can, except when, for many of us, it matters most. It’s a lump of coal in the stocking, but at least we have the stocking. Happy holidays.
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