Crazy Airfares!!

[Robbie Cottam]

Well, how much worse?

I'm not an aviation expert like you, but I have an understanding of how supply and demand works. I've heard lots of talk on CNBC about CEOs reporting that so far they've been able to "pass along increased costs to consumers". And they'll continue to do that....until they see demand drop precipitously....which will eventually happen. Two years ago it seemed like Peloton and Netflix could do no wrong...until people started to venture out of their homes again and sales/subscriptions plummeted. People are traveling now, but it's by far leisure travel that is spiking demand right now. If the airlines continue to boost prices into the stratosphere it's really pretty simple...people will stop flying, and they'll be forced to lower their prices.

This whole thread started when the OP reported that the usual United flight he takes was over $800 from EWR to MCO. A few posters pointed out that there were lots of flights in the $300s. So, people who want to pay less may need to be more flexible. In January, before the war in Ukraine started I was able to snag RT business class seats for two separate trips for less than we've paid for previous trips in the front of the plane. I wouldn't pay for those seats now as the price has really gone up, but we'd still take the trip...probably flying in premium economy. But if prices continue to rise for economy seats, once demand drops as the novelty of post-pandemic travel wears off (and that will happen)....people will simply stay home because they won't be able to afford it.

Depend, did the airline in question hedge, and at what price.
Currently oil is 100 dollars a barrel… with some experts saying oil could hit $240 a barrel over the summer …

so maybe more than double!
airline fares are really closely tied to oil prices.

 

[DCLMP]

I just booked Boston to Vancouver round trip for $313, so it's not everything that's insane.

Canada is not really a hot ticket right now. Cruises are Just starting to resume and they are practically giving them away. As restrictions are lifted that may change. You picked a good year to go price wise.

 

[DCLMP]

Depend, did the airline in question hedge, and at what price.
Currently oil is 100 dollars a barrel… with some experts saying oil could hit $240 a barrel over the summer …

so maybe more than double!
airline fares are really closely tied to oil prices.

I hope it’s not that soon. I’ve heard 2023 for that price. Can we just have one more good Summer please.

 

[Robbie Cottam]

I google it for that post…. Fortune reported it, along with Sachs and Barclays..

I hope it’s not that soon. I’ve heard 2023 for that price. Can we just have one more good Summer please.

 

[dvcgirl67]

Depend, did the airline in question hedge, and at what price.
Currently oil is 100 dollars a barrel… with some experts saying oil could hit $240 a barrel over the summer …

so maybe more than double!
airline fares are really closely tied to oil prices.

I would think Europe would need to immediately place a ban on Russian oil for that to happen, at least that's what I've read in the WSJ....but who knows. But I do remember quite clearly what happened in the oil market in the summer of 2008 when oil hit an all time high...in the $140's I think. Prices soared, and demand destruction quickly followed suit...and by the end of 2008 oil was in the $30s and the Great Recession was under way. Same will happen this time if prices get that high. I hope it doesn't happen because I would think that would send the global economy into a deeper recession than the less severe recession we're likely heading into some time next year. It's all speculation at this point. I try not to worry about it too much and just focus on strategies to navigate these more turbulent economic times. That's all I can do.

 

[Robbie Cottam]

I would think Europe would need to immediately place a ban on Russian oil for that to happen, at least that's what I've read in the WSJ....but who knows. But I do remember quite clearly what happened in the oil market in the summer of 2008 when oil hit an all time high...in the $140's I think. Prices soared, and demand destruction quickly followed suit...and by the end of 2008 oil was in the $30s and the Great Recession was under way. Same will happen this time if prices get that high. I hope it doesn't happen because I would think that would send the global economy into a deeper recession than the less severe recession we're likely heading into some time next year. It's all speculation at this point. I try not to worry about it too much and just focus on strategies to navigate these more turbulent economic times. That's all I can do.

yes, that is mostly correct! Figures are off a little but your point is correct.

However, 140 dollars in 2008 adjusted for inflation would about 185 dollars today.
So if that were to happen we could expect to see about a 70 percent rise in ticket prices.

 

[dvcgirl67]

yes, that is mostly correct! Figures are off a little but your point is correct.

However, 140 dollars in 2008 adjusted for inflation would about 185 dollars today.
So if that were to happen we could expect to see about a 70 percent rise in ticket prices.

Well, that will hit demand pretty hard I would think. I also think that for people who can afford to travel....it might not be a bad time to travel. My husband and I started to travel to Europe in 2003 and made trips back to various countries every year, or every other year depending on what we had going on. Our first trip to Italy was in 2008. We had an amazing time, and like pretty much everyone else who ever travels there....we fell in love with Italy. We traveled back there in 2010, 2013 and 2015. The level of the crowds from 2008 to that last trip on 2015 in cities like Rome, Florence and Venice was almost like night and day to us. Over the years we noticed a huge surge in travelers from China and the Baltic States in particular. I wouldn't say it wasn't enjoyable to be in Rome...because....well, it's Rome, but the super touristy sites were so crowded that they would have been difficult to fully enjoy. By that fourth trip we were venturing into new neighborhoods to us.

I'm not saying I would like to see the masses not be able to afford travel, but if there is going to be a lull....might not be a bad idea for anyone who can afford to see the more popular destinations...to do so.

 

[Robbie Cottam]

Well, that will hit demand pretty hard I would think. I also think that for people who can afford to travel....it might not be a bad time to travel. My husband and I started to travel to Europe in 2003 and made trips back to various countries every year, or every other year depending on what we had going on. Our first trip to Italy was in 2008. We had an amazing time, and like pretty much everyone else who ever travels there....we fell in love with Italy. We traveled back there in 2010, 2013 and 2015. The level of the crowds from 2008 to that last trip on 2015 in cities like Rome, Florence and Venice was almost like night and day to us. Over the years we noticed a huge surge in travelers from China and the Baltic States in particular. I wouldn't say it wasn't enjoyable to be in Rome...because....well, it's Rome, but the super touristy sites were so crowded that they would have been difficult to fully enjoy. By that fourth trip we were venturing into new neighborhoods to us.

I'm not saying I would like to see the masses not be able to afford travel, but if there is going to be a lull....might not be a bad idea for anyone who can afford to see the more popular destinations...to do so.

Or we could prevent all of that with oil production? It is as simple as supply and demand 101. Demand is high, supply is low, we just need to make more And everyone can have they low fairs they want. Inflation gets put back into check and trips from xxx to MCO go back to 250 round trip….

I’m say Global recessions is bad.
10 percent unemployment is bad
25 percent of homes being foreclosed on. (You left that out) is bad


what am I missing?

 

[dvcgirl67]

Or we could prevent all of that with oil production? It is as simple as supply and demand 101. Demand is high, supply is low, we just need to make more And everyone can have they low fairs they want. Inflation gets put back into check and trips from xxx to MCO go back to 250 round trip….

I’m say Global recessions is bad.
10 percent unemployment is bad
25 percent of homes being foreclosed on. (You left that out) is bad


what am I missing?

Well, I'm not saying at all that we're not experiencing a global fuel supply crunch. We are, it's undeniable. My only point of contention is that the U.S. alone can not fix the problem....because from what I read, that won't do the trick. How about our good "friends"....the Saudis. We all know they could go a long way towards helping alleviate this oil crunch by opening their spigots a lot more, but we all know why they're not....they're making a fortune. So I guess that's one thing left out of the mix.

I just feel like there are so many moving parts to our current global conundrum, more than in 2008 from my perspective anyway....and that was pretty darned complicated. There's a massive fertilizer shortage and so crops will be smaller, and the cattle pastures won't fatten up the cows as much...so higher beef prices. Russia is the larger producer of fertilizer in the world. Prices for electric vehicles (which I drive)....are going through the roof because there's a precious metals shortage for the batteries, due to sanctions against Russia...where a fair amount of those metals come from.

Will things get so bad to cause unemployment to hit 10%? I'm not sure...I hope not. I think we peaked out at 10.8% during the Great Recession. 25% home foreclosures....that I'm not so sure about, but I definitely expect the housing market to really cool down, possibly see a dip in prices and then a long period of little appreciation. We'll see...I think I see a storm coming, but you're predicting a cat 5 hurricane. Hoping it's not going to be that awful.

 

[Robbie Cottam]

9.9 in 2008

 

[melking23]

Yes, we are. Nuggets (one 12 count, one 8 count), fries (one large, one medium) & water for 2 are under $15 including tax. Totally filling.

The shakes you're in the habit of buying are almost doubling the cost of your eating out.

At my local CFA, the nuggets and fries alone already add up to $15.14 before tax. Pricing at CFA is not equal from location to location. It’d be even more expensive if I went to one 25 minutes away next to the interstate.

I do agree about the milkshakes although they are delicious. I never get them for myself, much less my kids. They’re $4 each here. I’d rather buy ice cream on sale at the grocery store and make my own milkshake.

 

[DCLMP]

I google it for that post…. Fortune reported it, along with Sachs and Barclays..

My sources are saying 2023 when things really start to get bad.

 

[DCLMP]

At my local CFA, the nuggets and fries alone already add up to $15.14 before tax. Pricing at CFA is not equal from location to location. It’d be even more expensive if I went to one 25 minutes away next to the interstate.

I do agree about the milkshakes although they are delicious. I never get them for myself, much less my kids. They’re $4 each here. I’d rather buy ice cream on sale at the grocery store and make my own milkshake.

If you buy a combo meal you can substitute a shake it's only a dollar or two more that goes for just about everywhere. I don't drink them myself. I prefer to maintain my healthy weight, but my teen boys still have the metabolism for it. If I'm going to drink calories I'll take a glass of red wine, please. My kids don't drink soda neither one has ever had a soda.

 

[DCLMP]

Well, I'm not saying at all that we're not experiencing a global fuel supply crunch. We are, it's undeniable. My only point of contention is that the U.S. alone can not fix the problem....because from what I read, that won't do the trick. How about our good "friends"....the Saudis. We all know they could go a long way towards helping alleviate this oil crunch by opening their spigots a lot more, but we all know why they're not....they're making a fortune. So I guess that's one thing left out of the mix.

I just feel like there are so many moving parts to our current global conundrum, more than in 2008 from my perspective anyway....and that was pretty darned complicated. There's a massive fertilizer shortage and so crops will be smaller, and the cattle pastures won't fatten up the cows as much...so higher beef prices. Russia is the larger producer of fertilizer in the world. Prices for electric vehicles (which I drive)....are going through the roof because there's a precious metals shortage for the batteries, due to sanctions against Russia...where a fair amount of those metals come from.

Will things get so bad to cause unemployment to hit 10%? I'm not sure...I hope not. I think we peaked out at 10.8% during the Great Recession. 25% home foreclosures....that I'm not so sure about, but I definitely expect the housing market to really cool down, possibly see a dip in prices and then a long period of little appreciation. We'll see...I think I see a storm coming, but you're predicting a cat 5 hurricane. Hoping it's not going to be that awful.

The fed has been buying mortgage back securities which has contributed to the inflating housing market. They continue to inflate, inflate, inflate. These little quarter/half-point interest rate hikes are all theatre and will do nothing to stop inflation. At some point, the debt market will implode and that will be the Cat 5.
The debt market is stable right now, but I would keep an eye on the 10-year yield. If it starts rising dramatically...the crash is coming. I think unemployment will be as high as 25%. The middle class is going to get squashed. Were going to have a society of have's and have nots which will lead to civil unrest. In the short term, money should be flowing into the dollar. It's still the prettiest pig in the barn of fiat money. 10 years from now I see the world economy being drastically different than it is now.

 

[dvcgirl67]

The fed has been buying mortgage back securities which has contributed to the inflating housing market. They continue to inflate, inflate, inflate. These little quarter/half-point interest rate hikes are all theatre and will do nothing to stop inflation. At some point, the debt market will implode and that will be the Cat 5.
The debt market is stable right now, but I would keep an eye on the 10-year yield. If it starts rising dramatically...the crash is coming. I think unemployment will be as high as 25%. The middle class is going to get squashed. Were going to have a society of have's and have nots which will lead to civil unrest. In the short term, money should be flowing into the dollar. It's still the prettiest pig in the barn of fiat money. 10 years from now I see the world economy being drastically different than it is now.

I don’t think conditions will get anywhere near what you’re laying out here. If I did…. I’d be locked in a bunker with my stash of gold… and guns. You’re calling for the next Great Depression and Civil War wrapped into one. I see a recession….but the kind of dire predictions you stated..no. And the debt bubble prognosticators have been saying this for many years. It’s quite possible that the bubble deflates slightly without the implosion that some on the fringe would like to believe Is always imminent.

 

[melking23]

If you buy a combo meal you can substitute a shake it's only a dollar or two more that goes for just about everywhere. I don't drink them myself. I prefer to maintain my healthy weight, but my teen boys still have the metabolism for it. If I'm going to drink calories I'll take a glass of red wine, please. My kids don't drink soda neither one has ever had a soda.

I joke that my son stole my metabolism and my daughter stole my bouncy, full hair. Milkshakes are no longer in the cards for me unless I plan to workout an extra 2 hours to burn that many calories. But I’ll have an adult beverage without thinking twice about the caloric load.

But back to the OP’s first post. I bought RT airfare x4 from ATL to PUJ (Punta Cana) at $680pp for basic economy in July. Not a great price but it’s not going to get any better. In fact, it’s now $750pp. Flying there on a Tue and returning the following week on Wed saved $850 vs Tue-Tue. The extra night was less than $350. By extending our vacation an extra day we’re saving $500. While the airfare still costs far more than the all-inclusive resort, I consider it a little bit of a win. We’re a very tall family (I’m 5’10” and hubs is 6’5”) so I was able to upgrade our seats to Economy+ for only $39pp. If I had bought those seats outright, it would’ve been $1050pp RT. Also, Delta was the only direct flight ATL and actually cheaper than SW by a couple hundred. SW would require us to change planes in FLL. Other airlines had 2 layovers. That’s an expensive way to delay the start of a vacay and extra opportunity for luggage to get lost.

Lastly, I miss Air Tran.

 

[SMF_mom23]

I joke that my son stole my metabolism and my daughter stole my bouncy, full hair. Milkshakes are no longer in the cards for me unless I plan to workout an extra 2 hours to burn that many calories. But I’ll have an adult beverage without thinking twice about the caloric load.

But back to the OP’s first post. I bought RT airfare x4 from ATL to PUJ (Punta Cana) at $680pp for basic economy in July. Not a great price but it’s not going to get any better. In fact, it’s now $750pp. Flying there on a Tue and returning the following week on Wed saved $850 vs Tue-Tue. The extra night was less than $350. By extending our vacation an extra day we’re saving $500. While the airfare still costs far more than the all-inclusive resort, I consider it a little bit of a win. We’re a very tall family (I’m 5’10” and hubs is 6’5”) so I was able to upgrade our seats to Economy+ for only $39pp. If I had bought those seats outright, it would’ve been $1050pp RT. Also, Delta was the only direct flight ATL and actually cheaper than SW by a couple hundred. SW would require us to change planes in FLL. Other airlines had 2 layovers. That’s an expensive way to delay the start of a vacay and extra opportunity for luggage to get lost.

Lastly, I miss Air Tran.

I was shocked how much SW costs compared to other airlines!

We are a family of five that live near St. Louis and so generally have good prices available for flights and have flown SW almost exclusively for years. With the exception of a trip to Las Vegas several years ago where I flew out on Allegiant and flew back SW, I couldn't tell you the last time I used any other airline. Last year, when shopping for flights for our June WDW trip, SW was significantly higher than both AA and Delta, even accounting for bag fees. I ended up applying for a Delta/AE gold card so I would get one free checked bag for myself (and up to 12 traveling with me), booking on Delta, and saved several hundred dollars vs SW, not to mention my flight options were better. A few months later, I booked another trip to Dallas on Delta and will fly back SWA, again based on cost and flight times.

Once the recession hits (and I'm quite sure there will be one), I have no idea how much we'll vacation, outside of visiting family about 5 hours away. As much as I would love to take a cruise over the holidays (we're limited on when we can take vacations due to having kids in school), I'm fairly confident it will be cost-prohibitive for us to fly and I don't like driving long distances.

 

[Dan Murphy]

We’re a very tall family (I’m 5’10” and hubs is 6’5”) so I was able to upgrade our seats to Economy+ for only $39pp. If I had bought those seats outright, it would’ve been $1050pp RT.

Was the $35 upgrade cost when you purchased or at the airport?

Lastly, I miss Air Tran.

6'6" here, I miss Air Tran so much also.

 

[melking23]

I was shocked how much SW costs compared to other airlines!

We are a family of five that live near St. Louis and so generally have good prices available for flights and have flown SW almost exclusively for years. With the exception of a trip to Las Vegas several years ago where I flew out on Allegiant and flew back SW, I couldn't tell you the last time I used any other airline. Last year, when shopping for flights for our June WDW trip, SW was significantly higher than both AA and Delta, even accounting for bag fees. I ended up applying for a Delta/AE gold card so I would get one free checked bag for myself (and up to 12 traveling with me), booking on Delta, and saved several hundred dollars vs SW, not to mention my flight options were better. A few months later, I booked another trip to Dallas on Delta and will fly back SWA, again based on cost and flight times.

Once the recession hits (and I'm quite sure there will be one), I have no idea how much we'll vacation, outside of visiting family about 5 hours away. As much as I would love to take a cruise over the holidays (we're limited on when we can take vacations due to having kids in school), I'm fairly confident it will be cost-prohibitive for us to fly and I don't like driving long distances.

I was just telling my husband that a recession is looming and we can’t bill our clients anymore, though I’ve been begging for that to stop for many years. Nature of the biz.

Southwest is compensating for “bags fly free” with their airfare rates lately. For the last 10 years I’ve only flown with them. I’m pretty sure the last time we flew with Delta was coming back from our honeymoon cruise. We were flying on SW buddy passes and all the seats were full for all the flights that afternoon. We ended up getting first class on Delta because it was way cheaper than economy. While I like SW (and that both my brother and aunt worked for AT and then stuck around through the transition to SW so I usually don’t pay anything to fly), I much prefer a full service airline with assigned seats. I miss the good old days when you didn’t have to pay extra for seat assignments or luggage. Upgrading your seat at the gate was easy and inexpensive.

I don’t mind driving long distances within reason. Driving from Atlanta to Ft. Lauderdale is not on my to-do list anymore but I enjoyed the drive from Atlanta to St. Louis. We drive to the beach, the mountains, WDW, and certain cruise ports, each about 6 hours away. I’ve taken our kids on road trips to the beach by myself no problem. I enjoy it so long as the bickering stays to a minimum. Mother’s Day week last year I made the drive by myself to the beach and back from meeting up with mom friends. Solo is my preferred way to travel! My greatest achievement in airline travel is TSA Pre-Check, especially at busy airports like ATL. It was basically a waste in Indy because the airport is so small and waaaaaay less busy in comparison. I know I’ll never not have it for all future travel though. My penny pincher hubs even agreed to get it so the kids and I aren’t leaving him in the dust come July.

 

[melking23]

Was the $35 upgrade cost when you purchased or at the airport?

6'6" here, I miss Air Tran so much also.

I had to call in to purchase our flights because I was waiting on my name change to be processed. My passport still had my maiden name so I left it that way on my travel accounts until I renewed the passport recently. As soon as the name change was complete I linked the flights to my SkyMiles acct and chose seats. That’s when I was able to upgrade. I imagine that if I booked online and skipped choosing seats until I was done paying for the flights I could’ve upgraded for the lower cost. It doesn’t give me the option to upgrade to first class at all but I’m not sure if it’s because of the young kids with us or because there’s only 10/16 seats still available at the front, give a take a couple of purchased seats.