If you plan to travel this year and haven't purchased your plane tickets, new research indicates that you'd be well-advised to do so now. The Omicron variant may have caused holiday travel complications, but experts are now predicting that it will reach its peak in the U.S. soon.
Air travel demand is predicted to come roaring back and, along with it, high airfare pricing. But, rising demand won't be the only factor that propels ticket costs upward, considering that the Bureau of Labor Statistics' (BLS) latest consumer price index (CPI) rose seven percent over the past year and continues to increase. That's the fastest annual hike in inflation rates in 40 years.
Travel app Hopper, which published its Consumer Airfare Index this month, forecasts domestic airfare pricing will increase by seven percent each month through June 2022, and achieve 2019 levels by April.
"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," Adit Damodaran, an economist at Hopper, told Fortune.
He pointed to heightened demand, seasonal fluctuations and the increased price of jet fuel as contributors to the predicted jump in airfare prices. The price of jet fuel is currently $2.56 per gallon, representing the highest rate since 2014.
"Over the course of 2021, we saw a 60 percent increase in jet fuel prices from $1.34 per gallon at the start of the year," Damodaran said. "We expect higher jet fuel prices to contribute to higher consumer airfare for 2022."
In January 2022, the average price of a U.S. domestic roundtrip flight (regardless of destination or origin city) came in at a near-record low of $234, with the average cost of roundtrip international airfare hitting a historical low of $649.
Scott Keyes, founder of Scott's Cheap Flights, told Fortune that his company's analysts expect to continue seeing great deals on international flights, at least through this winter, though average airfare pricing in 2022 is likely to be more expensive than in 2021.
And, as stated in the site's analysis report 'State of Cheap Flights 2022', a boom in last-minute deals on flights is expected to continue. Whereas, in pre-pandemic times, last-minute flights tended to be more expensive, now, airlines are dropping last-minute prices in efforts to fill empty seats.
"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," said Keyes.
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