By Nathalie Voit
Strong travel demand and high fuel prices are driving up the costs of flights, Adobe said in a report published on April 12.
According to data from the Adobe Digital Economy Index, U.S. airline tickets in March 2022 were 20% higher compared to pre-pandemic levels. Month-to-month, ticket prices increased by 15%. For reference, prices in February 2022 were only 5% higher than during the same period in 2019. Meanwhile, prices in January 2022 were 3% lower than in January 2019, Adobe said.
The spike in airfare costs is driven by a surge in travel demand. Consumers spent $8.8 billion on domestic flight bookings in March, a 28% increase over 2019 levels. On a monthly basis, online spending jumped 32%.
Overall, Americans spent $21 billion on domestic travel in the first three months of 2022 alone. In contrast, Americans spent $56 billion in all of 2021, Adobe said.
In addition to a resurgence in travel demand, inflation also increased ticket prices. While online spending on domestic flight bookings last month was 28% higher than 2019 levels, actual bookings were up just 12%, Adobe said. Month-over-month, online spending in March surged 32%. However, bookings only rose 15% from February.
Airfare is only the latest in a series of categories to get hit by inflation. On April 12, the Department of Labor said consumer prices rose to a new four-decade high of 8.5% in March. This is the sixth consecutive month of price increases above 6%, the department said.
“Consumers have seen online prices for physical goods rise now for 22 consecutive months, per the Adobe Digital Price Index, and inflation is becoming more prominent for services as well,” said lead analyst with Adobe Digital Insights Vivek Pandya. “The unleash of pent-up demand has been a major driving factor, as the desire for air travel is coming back more aggressively than anticipated.”
According to CME Group, Gulf Coast jet fuel futures settled at $3.3321 a gallon on April 12, up nearly 50% year-to-date and more than double one year ago.