If you’re planning your next getaway, you’ve probably noticed a significant jump in airfare costs. It’s no secret that flight prices seem to be soaring, leaving many travelers wondering, “Why Are Flights So Expensive?”. While recent regulations aim to tackle hidden airline fees, the underlying reasons for these high prices are complex and multifaceted. To shed light on this issue, we consulted with industry experts Ryan Ewing, founder of AirlineGeeks, Anton Radchenko, CEO of AirAdvisor, and Mercedes Zach, a travel agent at ASAP Tickets, to break down the factors contributing to expensive flights and offer advice on finding more affordable options.
According to Ewing, airline pricing is far from simple. “Departments have hundreds of people that do pricing, and it’s a very complex process,” he explains. He also points out the obvious impact of broader economic trends, stating, “Like anything in the world, inflationary factors are creating a situation where pricing is a bit higher, and airlines are no stranger to that.”
Let’s delve into the key elements that influence flight prices and discover how you can potentially save money on your next trip.
:max_bytes(150000):strip_icc()/TAL-check-in-desk-EXPENSFLIGHTS0424-0a45581c13f84404b996fdea869d50e4.jpg)
Decoding Airline Taxes and Fees
When you book a flight online, you might be drawn in by an attractive base fare, only to find the total cost significantly higher due to added taxes and fees. These surcharges fall into two main categories: government-imposed taxes and fees, and carrier-imposed fees. Government taxes are mandatory and include charges like the U.S. Passenger Fee, the September 11 Security Fee, air transportation tax, federal segment fee, and facility charges. The exact amounts fluctuate depending on your departure and arrival airports, layovers, and whether your flight is domestic or international.
Ewing highlights the impact of international tourism taxes: “Certain countries have pretty substantial tourism taxes, so those will definitely hide in your ticket.” He advises travelers to examine their raw ticket after purchase to see the breakdown of these additional costs.
To illustrate the difference between domestic and international taxes, let’s consider a couple of examples. A one-way, nonstop domestic flight from New York City (JFK) to San Francisco (SFO) on Delta Air Lines might show a breakdown like this:
- Base fare: $337.67
- U.S. Transportation Tax: $25.33
- U.S. Passenger Facility Charge: $4.50
- U.S. Flight Segment Tax Domestic: $5.00
- U.S. Passenger Civil Aviation Security Service Fee: $5.60
In this scenario, taxes and fees add approximately $40 to a $337 base fare, representing about 12% of the total cost.
Now, let’s compare this to an international round-trip flight from JFK to London (LHR) on Delta Air Lines:
- Base fare: $338.00
- Carrier-imposed international surcharge: $245.00
- U.S. Passenger Civil Aviation Security Service Fee: $5.60
- U.S. International Departure Tax: $44.40
- U.S. Passenger Facility Charge: $4.50
- U.S. APHIS Passenger Fee: $3.83
- U.K. Passenger Service Charge Departures: $60.80
- U.S. Customs User Fee: $6.97
- U.S. Immigration User Fee: $7.00
- U.K. Air Passenger Duty: $109.50
For this international flight, taxes and fees surge to around $487 on a similar base fare of $338, more than doubling the ticket’s price. To potentially reduce these costs, consider flying to or from alternative airports or transiting through different countries with lower tax rates.
:max_bytes(150000):strip_icc()/TAL-people-on-a-plane-EXPENSFLIGHTS0424-d6ca0dc6408e48cebbcbdbb46423a832.jpg)
Key Factors Driving Up Flight Prices
Beyond taxes and government fees, several other factors are contributing to the current high cost of air travel. Carrier-imposed fees, often related to fuel costs, are a significant element. These fees are particularly noticeable when using frequent flyer miles.
Radchenko from AirAdvisor points to rising jet fuel prices as a major concern. “The International Air Transport Association… is estimating the cost of jet fuel to rise to $2.70 per gallon, up from an average of around $2.66 per gallon in 2023.” He further notes American Airlines’ SEC filing indicating an expected fuel cost increase to between $2.80 and $2.90 per gallon, a substantial jump from previous projections.
Airlines are unlikely to absorb these increased fuel costs, and as Radchenko explains, “These cost increases will be passed onto consumers, whether through an increased fare price or a fuel surcharge on mileage redemptions.”
Seat availability also plays a crucial role in pricing. According to Zach, “global seat capacity for 2023 was just 3.7 percent behind 2019, and already in the first quarter of 2024, OAG expects it to be 2.9 percent ahead.” While this suggests potential price stabilization, ongoing issues with Boeing aircraft are adding uncertainty.
The safety and performance concerns surrounding the Boeing 737 Max are impacting the industry. Ewing notes, “I always say it’s a pretty bad day when the consumers start to realize what aircraft types they are flying on.” Concerns are such that some travelers are actively filtering out Boeing aircraft when booking flights.
Furthermore, aircraft delivery delays are reducing seat capacity. “Both United and Southwest have cut their planned aircraft delivery in 2024 in half, roughly,” Ewing states. This reduction in planned fleet expansion means fewer available seats, especially during peak travel seasons, driving prices up due to basic supply and demand principles.
Another significant factor is the lingering impact of staff shortages in the travel industry. Zach explains, “Another reason behind increased airfare prices in the previous years was the staff shortage across the travel industry, from pilots to flight attendants and maintenance technicians.” Layoffs during the pandemic have not been fully reversed, leading to capacity constraints.
Increased labor costs and fewer staff can translate to fewer flights and higher ticket prices. “The International Civil Aviation Organization (ICAO) estimated that by 2026, the aviation industry would require 480,000 new technicians to maintain aircraft and over 350,000 pilots, and that can take up to a decade to fully resolve,” says Zach, highlighting the long-term nature of this challenge.
How to Save Money on Flights
Despite these factors pushing flight prices higher, there are strategies to find more affordable air travel. Flexibility is key. As a seasoned traveler, changing your travel dates by even a day or considering nearby airports can yield significant savings. Opting for less popular destinations or traveling during the off-season can also reduce both airfare and accommodation costs.
Ewing recommends using flight search engines like Google Flights to research and compare options. “Nowadays, Google Flights is probably one of my favorites where you can really scale it down based on several filtering factors, so I use that for sure.” Google Flights’ “anywhere” feature is particularly useful for discovering budget-friendly destinations by comparing flight costs from your departure airport.
Considering budget airlines can also be a smart move. Ewing acknowledges the evolving quality of low-cost carriers: “I think there’s a stigma around airlines like Spirit and ultra-low-cost carriers, but nowadays they’re certainly offering a better premium product than they were.” He mentions Frontier Airlines’ UpFront Plus as an example, offering a first-class-style seat at a lower cost than traditional airlines.
Finally, explore using frequent flyer miles strategically. Redeeming miles can sometimes help you avoid certain government-imposed taxes, as illustrated by the JFK to SFO example where using miles significantly reduced taxes. However, be aware of potential fuel surcharges that may apply to mileage redemptions, depending on the route and airline.
While flight prices are currently elevated due to a combination of taxes, fees, fuel costs, seat availability issues, and staff shortages, by being flexible, researching options, and considering budget-friendly strategies, you can still find good deals and make your travel dreams a reality. When you spot a great fare, act quickly, as prices can change rapidly.
