Rising Costs and Uncertainty in the Air Travel Industry
As tensions between the U.S., Israel, and Iran escalate, the global oil supply chain faces disruptions that are beginning to impact air travel. This has led to increased concerns among travelers about the rising costs and availability of flights for their upcoming trips.
The International Energy Agency has warned that European countries may soon experience jet fuel shortages, which could force airlines to significantly reduce their flight schedules. In response, many airlines have already raised fees for checked bags and added fuel surcharges. The price of jet fuel has surged from approximately $99 per barrel at the end of February to as much as $209 a barrel in early April.
Airlines Adjusting Routes and Prices
Air Canada recently announced that it will suspend service to New York’s John F. Kennedy International Airport from June 1 until October 25 to manage fuel costs. Other major airlines, including United, Delta, Air France-KLM, SAS, Philippine Airlines, and Cathay Pacific, have also cut routes and increased ticket prices. Further hikes are expected if the conflict continues to disrupt oil shipments through the Strait of Hormuz.
Shye Gilad, a former airline captain and current instructor at Georgetown University’s business school, highlighted the challenges airlines face in predicting future conditions. “It’s very hard for the airlines to make predictions in this environment, so they’re going to be conservative, and that’s why it’s likely that their prices will remain elevated for some time until things really stabilize.”
Despite the higher costs, travelers still have options to manage their budgets effectively. Experts advise against a ‘wait-and-see’ approach to booking flights, especially as summer and peak travel periods approach.
Strategic Booking Tips for Travelers
Henry Harteveldt, president of Atmosphere Research Group, emphasized that even with a lasting ceasefire or peace agreement, it will take several months for jet fuel production and delivery to return to normal levels.
Harteveldt recommends that travelers act decisively. “If you find a flight whose schedule fits yours, with a fare you can afford, and on an airline you can at least tolerate, book it.” He also cautioned against Basic Economy fares, which come with numerous restrictions, including additional fees for checked baggage and seat selection, and limited refund options.
Opting for Standard Economy tickets may provide greater flexibility. Investing in refundable tickets can also be beneficial, as Gilad noted, “If the prices start to dramatically change, you can cancel and rebook for the better price.”
Experts recommend following traditional booking guidelines: international flights are generally cheapest when booked two to five months in advance, while domestic flights are best booked three to six weeks ahead of travel.
Last-Minute Bookings and Flexible Schedules
Last-minute bookings are likely to see continued price increases, with major airlines having more ability to adjust fares. Gilad advised, “Remember, especially if you’re traveling on the major airlines, they’re going to have more ability to adjust fares. If you book too close to your travel date, you’re going to pay more. The farther out you can book, the better.”
For those with flexible schedules, adjusting departure or return dates by a day or two can lead to significant savings. Considering alternative destinations may also result in lower fares, as flights to some European cities are less expensive than others.
Tools like Skyscanner’s “Explore Everywhere” feature can help identify more affordable travel options. Looking beyond the nearest airport for departures can also yield savings, as major hubs typically offer a greater number of flights at lower prices compared to smaller regional airports.
Managing Checked Baggage Fees
Traveling with only a carry-on bag, when feasible, can help avoid the increased fees for checked luggage recently introduced by major U.S. airlines, including Delta, American, United, Southwest, and JetBlue. If packing light is not an option, travelers should plan ahead, as airlines typically charge more for adding bags closer to the departure date.
Leveraging Loyalty Rewards
While ticket prices are rising, the number of airline points required for many flights has not increased at the same rate, according to Adam Morvitz, CEO of points.me, a loyalty rewards redemption search platform. Morvitz explained that airlines still need to fill seats, and providing more flights for fewer points is one strategy to achieve this.
Customers lacking enough frequent-flyer miles for a round-trip ticket can redeem travel rewards for one leg of a journey, freeing up cash for other expenses. Many travelers choose to redeem points through their credit card’s booking portal, where they typically hold a value of about 1 cent each.
Transferring points to airline loyalty programs can often unlock better value, as many major credit card issuers partner with various airlines. For example, American Express points can be transferred to Air France’s Flying Blue program, allowing travelers to utilize those points with the airline’s partner carriers, such as Delta.
“Points are a form of wealth, and consumers should recognize that those points increase spending power,” Morvitz stated.
Credit Card Benefits and Rewards
For those new to travel credit cards, sign-up bonuses may provide benefits usable as soon as this summer, with some bonuses substantial enough to cover a flight after meeting minimum spending requirements.
Morvitz noted, “Even if you were to travel the entire year, taking one trip per month, you would still earn more points simply by signing up for the card than actually sitting on a seat and flying.”
Points and rewards can accumulate through everyday expenses on groceries, dining, and gas, with some cards offering perks like free or discounted checked bags.
