Memorial Day weekend may reveal how much consumers are willing to spend this summer, whether they are flying or driving.
Airfare is at its highest as jet fuel prices have doubled over the past three months. After the US and Israel attacked Iran, the conflict disrupted key shipping channels. In April, domestic round-trip airfares averaged $623, their highest level in the last four years, according to Airlines Reporting Corporation data.
Jet Fuel Prices
Jet fuel is the second-biggest expense for airlines after labor. And with its sharp increase in recent months, airlines are passing those costs to customers. Because of rising fuel costs, airlines are scaling back their growth plans. This means fewer flights on certain routes, fewer seats to choose from, and, given the demand, even higher prices.
Rising jet fuel prices contributed to Spirit Airlines shutting down earlier this month. While other airlines absorbed its customers in the aftermath, Spirit’s absence also removed one of the industry’s biggest providers of low fares.
Memorial Day Could Test Customer’s Tolerance
Memorial Day weekend will give the travel industry a clearer picture of how much travelers are willing to spend. The Transportation Security Administration expects to screen 18.3 million people between Thursday and next Wednesday. That figure is slightly lower than the 18.3 million recorded during the same period last year.
AAA estimates that 39.1 million people will drive at least 50 miles between Thursday and Monday. That’s up just 0.1% from last Memorial Day weekend, marking the slowest growth in a decade, according to AAA.
This isn’t exactly surprising. Gas price-tracking website GasBuddy forecasts that the average gas price in the US will reach $4.48 on Memorial Day. That’s up from last year’s average of $3.14. Worse, GasBuddy expects prices to hit $4.80 by Labor Day “if the Strait of Hormuz remains closed for a significant portion of the summer.”
AAA said some people are waiting longer to fill up their gas tanks or putting off maintenance to save money.
Finding Good Deals
Finding good deals isn’t impossible. Kyle Potter, who runs the website Thrifty Traveler, recommends using Google’s “Explore” tool. The tool allows users to search for destinations based on the length of their trip. He also recommends traveling on Tuesdays or Wednesdays to get lower fares.
