Expensive? Yes. But try groceries. Or car insurance. Delta CEO Ed Bastian laid it out Friday on CNBC’s Squawk Box. Airfares are up, sure. But they are a “tremendous bargain” compared to the rest of the world. He didn’t sugarcoat it. He essentially said, “Get over it.”
Things like the war in Iran pushed prices higher. Bastian says if you worry about ticket prices, you haven’t been looking at the wider economy.
“Airfares continue to be a tremendous bargian,” he said.
The industry had to hike
Insiders have been making this case for months. Fuel costs surged. Carriers hiked fares to cover it. Since 2022, airfare inflation has actually lagged behind other parts of the economy.
In May, the Federal Reserve reported the average fare at $329. Adjust for inflation. That flight is actually 23% cheaper than it was a decade ago. To Wall Street? That’s proof prices should rise.
Delta’s chief commercial officer, Joe Esposito, told investors Friday there is no coming back down. Not yet. He called it “overdue.”
“A lot of confidence,” Esposito added, “in the fact that we’re holding onto the pricing environment.”
Bad news for your Thanksgiving or Christmas plans.
The numbers don’t lie
Points Path crunched the data Saturday. Domestic flights booked three to five weeks out are 20% more expensive than this time last year. International flights? About 15% higher in August.
Here’s the kicker. Oil prices are down. We see it at the pump. AAA reported gas averaged $3.82 per gallon Friday, down from $4.56 late May. Gas is cheaper. Airfare isn’t. Why?
A slight dip
There is a sliver of good news. August fares are lower than mid-May. Domestic tickets dropped roughly 5% since that peak. Maybe that’s the “balance” Bastian talked about.
Some carriers are sprinkling award deals into late summer. I snagged a Labor Day one-way to Naples on American Airlines for 21k miles. It was a steal. Rare these days.
How to actually book
Want to save? Don’t lock in a destination early. Cast a wide net. Use Google Flights. Use Kayak. Look at dates.
- Fly Tuesday or Wednesday. Thursday, Friday, and Sunday are packed.
- Use transferable points. They are flexible. Transferring to Air France/KLM’s Flying Blue or Air Canada’s Aeroplan often yields better value for transatlantic flights.
- Try Bilt Rewards. You can move points to Alaska or Hawaiian to book on American Airlines. Short hops start at 4,5k points one-way.
Demand stays strong
Slashing prices? Unlikely. Unless people stop flying. They aren’t. Airports are packed. Even with smaller July 4th crowds than last year, planes are full.
Supply and demand, as Bastian put it. Demand is strong. Supply is in balance. Translation? We are stuck here for a while.
