The holidays are behind us, and it’s time to start planning your travel for 2022. But what will flight prices do this year?
Throughout much of the pandemic, airlines simply threw out their rulebooks for how they priced flights. 2020 fares sank to unthinkable lows: Think sub-$50 domestic flights on major carriers, $200 roundtrip flights to Europe, and even a $63 flight to Chile and back. 2021 also saw its own share of mind-blowing deals. Basic economy fares vanished, and even the costly fares when booking-last minute all but disappeared.
However, after 20+ months of pandemic bargains on airfare, can travelers expect flight prices to rise this year? Will airlines hike prices as travelers continue to return to the skies and the cost of fuel rises?
Yes and no. Our team of flight deal experts spends all day, every day searching for the lowest airfares around the world for our Thrifty Traveler Premium subscribers. And while we may see average airfare creep up across the board in the coming months, that’s not what truly matters. The cheap flight deals are still out there – and they aren’t going anywhere.
We’re still finding rock-bottom fares every day for travel deep into 2022. We put together a list of some of our favorites so far, and we find more every day for our subscribers.
So while higher fuel costs and growing travel demand could push average prices higher, there are other factors that will keep cheap flight deals in our futures.
The rules we came to understand about flight prices were upended during the COVID-19 pandemic, but a familiar foe is threatening to raise airfare now that the airline industry recovery is well underway.
During their quarterly earnings calls last fall, airline executives offered rosy projections of a post-COVID recovery of the airline industry. We found four similar reasons for optimism in some key travel metrics, too. In those same earnings calls, however, executives pointed to the price of crude oil as a reason for caution, seemingly hinting at an uptick in airfares.
Plus, a whole new market of foreign travelers have their sights set on the United States after our borders opened to vaccinated individuals in December, which could lead to increased demand across the Atlantic going forward.
The bottom line: Unbelievably cheap flights are still out there.
Supply and Demand
After it nearly evaporated in 2020, demand for travel is back and isn’t going anywhere.
As with all things, one of the biggest factors behind flight prices is the simple law of supply and demand. Demand disappeared as the pandemic first struck last year, forcing airlines to cut the supply of flights until it returned. Airlines dropped routes and cut frequencies, running just 20% of their normal operations – or less.
With next to no appetite for travel, they slashed fares to unthinkable lows to generate whatever sales they could.
We’re betting on more flight deals like this one. Get them by trying Thrifty Traveler Premium today for $7.99 a month!
Summer and fall travel surged, but things aren’t quite back to normal yet. It will still take a while travel to return to its pre-pandemic levels, especially as governments continue to monitor COVID-19 variants. That’s especially true of business travel, which has been so critical for airlines to churn out record profits … and it may never fully return.
Critically, airlines still have some planes in storage that they can bring back as we continue on the path back to normal. Despite some growing pains over the holidays, they should be able to continually ramp back up the supply of flights as travel continues to recover in 2022.
But one thing was made clear this summer: Airfare could be on the way up. Fares that were once under $100 (or less) are on the rise as Americans who were stuck at home for the last year get back out into the world.
Beyond that? There’s no clear trend line. Cheap fares are still prevalent for this winter, and even out into summer and fall of 2022 – but it depends on where you’re going.
So despite all the talk about flight prices skyrocketing, we’re still finding some of the cheapest flights for future travel – in some cases, cheaper than anything we’d seen throughout the worst of the pandemic.
Premium subscribers who booked this one got in on a rare deal! We couldn’t believe our eyes when these Delta nonstops to Hawaii as well as the Hawaiian Airlines connections to the other islands went on sale.
Read up on the return of cheap flights to Europe – and how you can snag fares to Madrid, Paris, Zurich and beyond under $300!
Driving those crazy-low fares was a lack of demand. While Americans have been welcomed back to Europe since the early summer 2021, foreign travelers were still not allowed to enter the United States for nearly 20 months, stifling sales and leaving some planes half-full flying across the Atlantic.
That changed in November, a joyous day in the travel world as planes full of vaccinated visitors landed on U.S. soil for the first time when travel restrictions finally fell.
This uptick in demand could push prices upward. But airlines are resuming more and more transatlantic routes that were paused during the pandemic, too. That means there will eventually be more seats to help meet that increase in demand.
In short: Cheap flight deals aren’t going anywhere. When the pandemic first upended travel, we saw airlines slash fares to get more travelers on planes. Now, demand is bouncing back – but capacity on many major airlines is returning to normal, too.
That means we think you can count on some big sales for the foreseeable future, even if there is an overall uptick in average fares.
Competition Will Drive Flight Prices
If supply and demand is the principle behind airfare, competition between airlines is the gamechanger.
The airline industry is cutthroat. Every year, we see new players enter and exit the game. Even in the midst of the worst year for the airline industry, we saw not one, not two, but three new U.S. carriers start up in 2021: Avelo Airlines, Breeze Airways, and Aha!
And in the meantime, airlines are constantly targeting their competitors, offering dirt-cheap prices to undercut each other in hopes of winning more customers. The connection between competition and price is undeniable. And we’ve seen that competition take off lately. See our guide to “fare wars” and how they always mean savings for you, the traveler.
Lately, Thrifty Traveler Premium subscribers may have been blessed with some of the cheapest fares to Europe we’ve ever seen. That’s because the airlines are competing to fill their seats heading across the Atlantic.
After airlines began discounting transatlantic fares to $400 or less this summer. During that flurry, we found fares to Madrid (MAD) from nearly every U.S. airport, flying American Airlines for under $300 roundtrip.
And it’s not just Europe. Earlier this year, we saw Alaska Airlines and Delta battle it out for fares to Anchorage and Fairbanks. The two went back and forth for months with dirt-cheap fares and even a Delta SkyMiles flash sale with roundtrip flights to Alaska from just 5,000 SkyMiles.
Want flight deals like this one sent to your inbox? Sign up for Thrifty Traveler Premium!
Critically, the major carriers like Delta, American, and United aren’t just fighting with each other anymore. With business travel out and leisure travel roaring, even the biggest airlines have to compete with low-cost budget carriers like Spirit, Frontier, and Sun Country. That’s a recipe for some low fares for the foreseeable future.
Unfortunately, it’s not all good news – especially when it comes to international travel. Many of the budget airlines flying to Europe have disappeared.
WOW Air came out of the gates hot with some of the lowest pricing to fly between the U.S. and Iceland, with flights under $50 each way. Norwegian Air and TAP Air Portugal have made their name with low fares across the Atlantic but continue to struggle. And the list goes on.
WOW Air collapsed a year ago. Primera Air went kaput in 2018. And now, Norwegian has stopped flying between the U.S. and Europe altogether.
These budget carriers drove flight prices to Europe down to record lows in recent years – as low as $300 round-trip (or even less.) Sure, you can snag a cheap flight on one of these barebones airlines. But they’ve also forced major airlines like Delta, American, United, and their international partners to compete on price, too. And that’s a win for consumers. Without that competition from the likes of Norwegian, the pressure on those bigger carriers is gone.
Fortunately, there’s reason for optimism: Those budget carriers are making a comeback … under a different name. Two officials from WOW started PLAY airlines, with plans to start flights to the U.S. next summer. Norse Atlantic Airways – founded by Norwegian’s creator – has similar plans.
For now, we’re still finding dirt-cheap fares to Europe. But the future of cheap flights hinges on that competition staying strong.
Jet Fuel Prices
The cost of oil sunk to record lows during the COVID-19 pandemic. And that’s huge for airlines: Fuel costs are a huge expense. The lower fuel prices go, the more freedom they have to offer incredibly low airfare like this one to Iceland.
Jet fuel is one of the biggest costs for each and every airline. It’s another huge factor in the price of travel. And while it dropped like a rock in 2020, it surged in 2021 – and airline executives are taking notice.
Crude oil prices have steadily climbed over the last year. Airline CEOs have not been shy about pointing to these numbers as the companies enter the holiday travel season.
At the end of October, U.S. jet fuel was $2.32 a gallon – up more than 115% from a year ago, according to S&P Global Platts data analyzed by CNBC.
“Higher jet fuel prices lead to higher ticket prices,” United CEO Scott Kirby told CNBC’s Squawk on the Street. “Ultimately, we’ll pass that through.”
United is not on an island here. Delta also projected that crude oil prices could stunt the airline’s recovery slightly, and American Airlines CEO Doug Parker primed customers for some crude oil-related fare increases during American’s earnings call, too.
“Oil is our second largest expense,” Parker said, according to Business Insider. “So when it increases, the cost of air travel increases.”
Predicting airfare is more art than science. It can be unpredictable, given the puzzling sales we see from airlines day after day, year after year. Cash grabs, mistake fares, flash sales, and fare wars can spring up at any moment.
There are still bargains to be had now for future travel. Despite some increases in flight prices and warning signs ahead, we’re still bullish on the future of cheap flights as we all return to the skies in 2022.