After a year of canceled trips, the pent-up demand for travel is unlike anything we’ve seen. With so many people now back to planning travel, what will it mean for our beloved cheap flights?
Let’s start with the bad news.
Summer flights will get more expensive. The availability of cheap flights for summer 2021 will wane.
First, as vaccinations become widely available, demand for summer flights will surge over the next two months. The cheapest fares are likely to get snatched up in the next few weeks, and many already have been.
Second, summertime is always one of the two most expensive times of year to travel. (The other being the Christmas/New Year’s period.) It’s not just nice weather, but also for many students/teachers/families with kids; summer is one of the only times they can travel. So many tickets get sold that summers are for airlines what Black Friday is for retailers.
Advice: Right now, we’re still awash in cheap summer flights. So if you’re hoping to travel this summer and want a deal, book sooner rather than later. Waiting until May could mean your odds of getting a good deal will be significantly lower.
The good news.
Cheap flights will continue coming out of the pandemic
Think back to econ 101. When demand for something goes up and supply stays the same, the price goes up.
But should we expect the supply of plane seats to stay the same coming out of the pandemic? No. Airlines still have thousands of planes grounded. In fact, throughout the pandemic, as demand has increased, it has been met with an increase in supply.
Another factor causing flights to stay cheap is that leisure travel will rebound much more quickly than business travel.
Airlines love business travelers because they don’t care what a fare costs; their company is paying. But leisure travelers? We care a lot about what the airfare is. Price is by far the number one factor leisure travelers make their purchasing decision on.
As a result, there’s a natural ceiling to how much airlines can charge when they know it’s vacationers buying rather than business travelers. It’s not that Delta wouldn’t love to charge more for your ticket to Florida. It’s that if they do so, JetBlue will underprice them, or you’ll road trip instead.
Never in history has it been cheaper to fly, and that was true for years pre-pandemic.
Why have flights gotten so cheap? Today, airlines make most of their money from other revenue streams: selling credit cards and miles, premium tickets like business class, corporate contracts, cargo, and so on.
Your coach ticket doesn’t matter to airlines like it used to.
The dynamics that caused coach fares to become less important for airlines will continue to exist post-pandemic, keeping flights cheap.
You can’t book average fares. You can only book available fares. It’s important not to forget that, especially over these next few months when you’ll see dozens of headlines about fares going up.
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