The airlines reported record bookings in June for travel during the rest of the summer. But carriers are flying with fewer seats available than before the pandemic: capacity at the four largest airlines is down about 13% from three years ago.
That combination of very strong demand and limited availability sent fares soaring.
Soaring fares, canceled flights
The amount passengers paid to fly each mile on the big four carriers was up 19.3% in the second quarter compared to 2019. Another measure of fares that compares passenger revenue to capacity rose 22%.
But those increases don’t tell the whole story. Business and international travel hasn’t returned to pre-pandemic levels. Those tickets typically cost much more than domestic airfare. Unlike previous years, when airlines could avoid some fare hikes for leisure travelers by jacking up tickets for business and international passengers, this year the bulk of fare increases are hitting domestic fliers.
“The leisure traveler is taking it on the chin right now and they’re willing to do so,” said Jim Corridore, senior insights manager for research firm Similarweb.
Service has become a massive problem as well.
About 134,000 US flights have been canceled so far this year, according to tracking service Flight Aware, more than twice as many as were canceled in the same period last year. That represents 2.6% of all scheduled flights so far this year.
Staffing shortage also hitting passengers
Airlines don’t have sufficient staff to recover when events like bad weather cause delays or flight crews max out the hours they’re allowed to work under federal safety regulations.
During the pandemic, carriers offered early retirement and other buyout packages to make voluntary reductions in staffing. All of them are still struggling to get operations back to normal as they scramble to hire and train the staff necessary to restore capacity.
“A lot of pilots retired. It’s not easy to replace them,” said Runner. “It’s a long process, it’s still going to be a year or so to have the airlines have a full schedule that this level of demand will dictate.”
Complaints also soar
Passenger complaints to the Department of Transportation have soared to more than triple pre-pandemic levels.
The Department of Transportation announced new rules Wednesday that would require refunds if a flight is canceled or disrupted, including
But in a deregulated industry, there’s little Buttigieg can do about the fares themselves.
Mergers mean fewer choices
“Fares are likely to rise if a disruptive price competitor is going away,” Corridore said.