Ticket prices for air travelers headed out of DFW International Airport and Dallas Love Field have already plummeted more than 28% from the summer travel peak, but analysts warn that airfares could spike again heading into the holidays.
Wednesday’s Consumer Price Index report showed that nationwide airfares dropped 7.8% in July from the month before. That’s still 27% higher than a year ago, but an improvement from what consumers were paying in the spring as they were snatching up tickets for long-awaited summer trips, according to travel site Hopper.
In fact, prices for air travel are down 25% from the peak in the spring and are expected to decline more over the coming weeks as schools restart, the summer travel season wraps up and the airline industry enters one of its slowest seasons of the year.
“The prices have come down significantly from that peak,” said Hopper economist Hayley Berg. “We are seeing a bit of a normalization and it’s a very good sign for travelers.”
Round-trip domestic airfares will be about 40% cheaper than the peak for September and October travel, according to Hopper. It’s typical for prices to drop in the fall, but this kind of drop is only happening because summer prices were so high and business travel, which carries airlines in the fall, is still softer than before the COVID-19 pandemic.
Back in April, passengers flying out of Love Field and DFW Airport were looking at domestic airfares of $343 on average, according to Hopper. Today, people are paying $246, a 28% decrease.
This spring was a historically painful period for anyone buying airfares. After soft demand for two years and cheap travel, fares soared past 2019 prices by 26%.
After the summer surge, though, airfares are now about 4% cheaper for summer travel flying out of Dallas-area airports to domestic destinations, and about 4% for international trips.
Air travel has been strong all summer, but that demand has been steady. Despite briefly surpassing pre-pandemic travel numbers on June 30 and July 1, airport traffic is still down 11.4% since the beginning of June compared with the same period in 2019, according to the Transportation Security Administration.
New waves of COVID-19 variants and surges in case counts didn’t hurt airlines this summer the way the omicron variant did last winter. That should help airlines plan more consistent schedules and create more predictability for airfares, Berg said.
“Media coverage drives demand for the desire to travel and there hasn’t been as much coverage lately,” she said.
After reporting record high revenues for the April to June period, airlines were preparing for a fall drop. American Airlines, United and others trimmed thousands of flights out of fall schedules in hopes of giving overwhelmed staff a break before the holiday rush.
“You certainly can’t push for leisure travel at the same fare levels as the summer,” Southwest Airlines chief commercial officer Andrew Watterson said during the company’s second-quarter earnings call in June.
As one might expect, passengers’ destinations change, too. Business hubs such as New York, Washington, D.C., Chicago and Los Angeles are among the most popular destinations for Dallas travelers, along with Las Vegas, a popular stop for short getaways.
Early predictions on holiday travel are looking different, though. Airlines are still limited in scheduling flights because of staffing shortages, even though there is plenty of demand from passengers.
After paying just $238 for average round-trip tickets in September and October, airfares should zoom up to around $380 on average for Thanksgiving through New Year’s, according to Hopper. That would be about $50 higher than consumers were paying when summer travel prices peaked in April.
