Raucous spring vacations are a rite of passage for many college students, and as the pandemic subsides, many were expecting a fun trip that felt a little more normal.
But now, rising fuel prices are ruining spring break yet again.
Soaring fuel prices have led airlines to stall on scheduling more flights, as U.S. Gulf Coast Kerosene-type jet fuel reached the highest price since 2014.
Jet fuel is a product of refining crude oil, so a spike in crude oil prices drives up the price of jet fuel, which eventually increases airfare. In response, airlines have been reducing flight frequency and upping the cost of flights.
Alaska Air Group is trimming down the number of flights by 5%, and Allegiant Airlines is planning to trim flight frequency between 5% and 10%, according to the Los Angeles Daily News.
Earlier this month, United Airlines said it would be reducing flight capacity due to fuel prices, global instability, and supply prices. To top it off, Southwest will drop 65,000 scheduled spring flights due to staffing issues, according to Aviation Pros.
Stressed out spring breakers
Spring breakers have been among the most affected groups and have reported flight delays and cancellations. Many college students missed out on spring break for two years because of the pandemic, adding to the frustrations.
In Orlando, spring breakers are also dealing with delays and cancellations, according to Fox 35. Earlier this month, to add to the chaos, storms prevented travelers from completing travel plans. 266 flights were delayed, and 21 cancellations packed the airports as the bad weather continued.
Another affected area is Houston, where many travelers have experienced high traffic and delays due to spring break and the ongoing construction at George Bush International Airport. The airport has advised travelers to arrive at the airport ahead of time, at least three hours before domestic departures and at least four hours before international flights.
This ordeal has become a trending topic on TikTok, where spring breakers are sharing their discontent under the hashtags #stranded, #sendhelp, and #springbreak2022.
How will this affect the rest of us?
The cost of domestic flights is increasing by 36% due to high demand after two years of COVID and soaring fuel prices, according to Bloomberg. If airlines can’t pass on expenses to consumers, it will be difficult for them to maintain profits.
To counter Russia’s invasion of Ukraine, the U.S. banned imports of Russian crude oil which pushed oil prices as high as $130 per barrel.
While the war is a factor in the fuel price spike, the increase was bound to happen. Last fall, United Airlines’ CEO predicted that jet fuel costs would drive up ticket prices, according to The Daily Mail.
Previously, consumers could expect a three-month delay between rising fuel prices and ticket fares. Now airlines are changing prices at a much quicker pace.
Delta Airlines officials said they were optimistic that hiking up ticket prices would offset rising fuel costs during the JPMorgan industrial conference. Management estimates that tickets will increase an additional $10 to $15 per ticket to compensate for high fuel costs.
The average airfare ticket from the U.S. to Europe is also set to increase by 16%, according to Hopper.
How will this affect airlines?
The industry is concerned that spiking gasoline prices will limit consumers’ spending power, hurting demand for airfare.
In the New York harbor, spot jet fuel prices have jumped to $3.98 a gallon, a 73% increase and the highest since 2008. In January, airlines predicted prices would only increase to $2.50 a gallon.
This has led to gains for airline stocks. Allegiant’s parent company, Allegiant Travel Co., rose 2.4%, and Alaska, a Seattle-based airline, saw a jump of 4.1%.
Alaska is experiencing high demand this spring break season but is concerned fuel prices will affect this. At a Raymond James conference, CFO Shane Tackett said, “The impact on the economy is the question we all have now.”
Although Alaska expects to return to pre-pandemic levels of capacity, it said it “will continue to prudently adjust capacity as necessary in response to the evolving fuel environment,” according to Bloomberg.
United has disclosed that the flight reduction could lead to a higher Cost Per Available Seat Mile (CASM), which would be several percentage points above the benchmark they had initially expected. Despite rising fuel costs, the company believes it will have substantial revenue.
What can you do about it?
Experts say that if you are planning trips, you should buy your tickets now because the prices will continue to rise.
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