Airlines have been swimming in profits over the last couple of years, thanks to low fuel costs, fewer empty seats on departures, and plenty
of passenger fees.
Singapore flightsThings have been going so well, in fact, that in some cases airlines have lowered airfare prices and improved the flying experience with new
entertainment systems, better coffee, and the return of free snacks.
But the trend toward lower flight prices and a more customer-friendly approach appears to be fading.
Oil and labor prices are on the rise for airlines, causing profits to shrink. For example, Delta’s profits in the fourth quarter of 2016
decreased 36.5% compared to the same time the year before, largely due
to higher wages paid to pilots in the aftermath of a new labor contract.
Total airline profits hit around $35 billion in 2016, and they’ve been
projected to reach “only” $30 billion in 2017.
Naturally, the airlines aren’t going to watch passively as profits
decrease. Most industry experts foresee higher flight prices this
year—and to some degree, rising airfares are already here.
The travel booking and airfare-tracking estimates the average domestic flight price at $222 this month, compared to $210 in January
2016. The site’s forecast calls for U.S. flight prices to average $239
in March 2017 (compared to $227 in March 2016) and $265 in May 2017
($247 in 2016), up to a high of $271 in June 2017 ($254 in 2016).
While higher airfares are expected across the board, analysts anticipate that business travelers will face particularly steep price
hikes in 2017. “We can expect that fares for business travelers will be
trending up,” Atmosphere Research Group analyst Henry Harteveldt told
the Los Angeles Times. “Airlines are always trying to get a pound or
more of flesh.”
