MILES PARKS, HOST:
Jampacked airports, crazy, expensive fares - it must mean that spring break travel season is here. We wanted to take a look at what exactly is driving these sky-high airline prices, which the Fed has noted are a big part of what's driving inflation right now. Helping us to break it all down is NPR's transportation correspondent David Schaper. Hey, David.
DAVID SCHAPER, BYLINE: Hey there, Miles, great to be with you.
PARKS: Great to have you. So first of all, let's just start with demand. Almost exactly three years ago, no one was flying at the start of the pandemic. Is demand fully back?
SCHAPER: Yeah. Yeah, it actually has. It's bounced back much more quickly, at least domestically, than the airline industry was prepared for, even. And so they were short-staffed when people came back flying in droves last year. And that's why we saw all those flight delays and cancellations and frustrations among travelers last spring and summer. The airlines do seem better prepared now, and they'd better be ready because the industry group Airlines for America says they'll be flying up to 2.6 million people a day in March and April. Here's the group's chief economist, John Heimlich.
JOHN HEIMLICH: That will be up almost 10% year over year, but notably up 1% from the same period in 2019, which would be, we believe, an all-time high. And that is occurring even though the airlines have 10% fewer flights scheduled for that period than they did in 2019.
PARKS: Whoa. So walk me through that. We have fewer flights, but more people flying.
SCHAPER: Yeah. Well, that's because several airlines, the major network carriers in particular, like American, Delta, United - they're flying bigger planes. And those planes are all full, many without an empty seat at all. And it's actually more profitable for them that way - flying more people per plane instead of flying a lot of smaller planes into a lot of different destinations. But, you know, travelers should know that that's left some smaller cities served by regional airlines with fewer flights. And there are even a few that have lost all airline service entirely.
PARKS: I mean, honestly, I can say that I was looking this week at booking a trip with some friends later this year, and I was appalled at how expensive these airline tickets are. Can you put this into context? Just how high are the ticket prices right now?
SCHAPER: They're very high. The average domestic round-trip airline ticket price was $571 in February. That's a 23% increase from last year and up 8% just from January. This is according to the Airlines Reporting Corporation, which tracks airline sales data. And now that price, $571 - that's for all tickets sold, so it includes first class and business class. Your economy prices will be a little bit less. Hayley Berg, chief economist for the travel search and booking app Hopper, says there are a few reasons why these prices are so high.
HAYLEY BERG: The price of jet fuel is significantly higher than it was pre-pandemic. That's going to make every flight more expensive. Labor costs are also rising. Inflation is driving increases in the cost of everything, including giving peanuts out on a flight. So there is incredible cost pressure.
SCHAPER: And that cost pressure comes at a time of enormous demand, as we've said, and that's kept prices higher. But Berg does note that high prices are now starting to level off.
PARKS: I mean, the elephant in the room here, David, is that these airlines did get tens of billions of dollars in government relief money...
SCHAPER: Yeah.
PARKS: ...During the pandemic. So how does that play into the fact that these companies are continuing to raise prices?
SCHAPER: Well, you know, the $50 billion in federal pandemic relief that the airlines got was supposed to be to keep employees on the payroll so they would stay ready for when the travel market recovered. But they ended up giving a lot of veteran pilots and flight attendants, mechanics and other workers incentives to leave their companies or take an early retirement. So that's what left them short-staffed and unable to handle the surge in air travel last year and even this past winter. That's left a lot of travelers frustrated because they do see that taxpayers gave the airlines quite a bit of money to help them stay afloat. But, you know, the bottom line is that, you know, the market is what the market is. People just really want to travel and seem to be willing to pay the higher prices despite the frustrations and the pain they're enduring at the airport.
PARKS: That's NPR's David Schaper. Thank you so much for walking us through this, David.
SCHAPER: My pleasure, Miles. Transcript provided by NPR, Copyright NPR.
