According to Hopper.com’s second-quarter Consumer Travel Index, domestic airline prices have fallen by 15 percent from last year. The current average for roundtrip flights within the United States are standing at $285. This decline is expected to continue slightly below 2019 levels until the holidays when fares typically rise due to increased demand.
International Travel is in Demand
In contrast, international travel is experiencing a surge in demand, resulting in significant price increases. Flights to Europe have risen by 35 percent from last year with ticket prices exceeding $1,000. Trips to Asia are up 23 percent from 2022 and a staggering 61 percent higher than pre-pandemic levels in 2019.
The shift towards international travel is driven by a phenomenon known as “revenge travel.” People are choosing to explore international destinations as a way to make up for lost time during the pandemic. Some financial experts attribute this trend to a change in people’s mindset about personal finance.
However, the increase in international travel comes at a time when inflation remains high, making it difficult for some individuals to afford both domestic and international trips. Additionally, rising oil prices are putting pressure on airlines, which may lead to further fare hikes on all flights.
Economy Airlines are Experiencing Mixed Results
Major airlines, like JetBlue and Southwest Airlines, are experiencing mixed results, due to these travel trends. JetBlue reported increased demand for long-haul international flights, while Southwest Airlines saw a decline in earnings from domestic travel. Other carriers also are concerned about waning domestic demand and rising operating costs.
To offset the financial impact of reduced domestic travel, some airlines are renegotiating labor contracts, resulting in increased wages for pilots. For instance, United Airlines and its pilots’ union reached an agreement that will raise pilot pay by up to 40 percent over four years, following years of challenging negotiations.
