Are airfares headed for the sky?

An airfare price trendline compiled by the Hopper booking site suggests that the bargain days for airfare that have prevailed through most of the pandemic may be nearing their end, driven by sharp rises in both demand and fuel costs.

While inflation and supply chain issues have affected many other prices, airfares have been generally low compared to 2019 because airlines have struggled to fill seats for much of the past two years. But with more traveling, the need for super-low-fare enticements ay be at an end, with airlines looking to recover some of their recent losses. In the past week or so, all three U.S. legacy airlines reported quarterly losses.

Add to that a 60% rise in jet fuel costs over the course of 2021, and there's even more reason to look for price increases, since fuel costs are about 30% of operating expenses. Hopper is predicting rises of about 7% a month for the next few months on domestic routes and around 5% on international routes.