US holiday airfares are set to reach their highest level in a decade, with elevated jet fuel costs linked to the conflict in Iran pushing up the price of domestic flights, according to a forecast from fare aggregator Hopper.
The average return ticket for travel within the US over Thanksgiving is expected to cost $402, an increase of $95 compared with the same period last year. Christmas fares are averaging $452, up $85 year on year.
Domestic return fares are already 31% higher than at the same point last year, Hopper said. The company attributed the rise to months of increased jet fuel costs caused by the conflict.
Jet fuel can account for as much as 30% of an airline’s operating costs. As oil supplies from the Middle East have been disrupted, the resulting rise in crude prices has also increased the cost of refined products including aviation fuel and diesel.
Airlines have responded by raising fares, adding passenger surcharges and cutting routes, according to the analysis.
Global jet fuel prices averaged about $99 a barrel before the war began in late February, according to the International Air Transport Association. They reached $209 in April and stood at $195 a barrel in mid-September, based on data from S&P Global Energy Platts cited by the association.
“When you see a more than doubling of that cost, it’s inevitable that prices will have to increase to offset it,” Hayley Berg, an economist at Hopper, told CBS News.
Brent crude briefly exceeded $101 a barrel on Monday before falling back to $97.83 amid hopes of an agreement between the US and Iran that could end the fighting and reopen the Strait of Hormuz. Oil had been trading at about $72 a barrel before the war began.
How to reduce the cost of holiday flights
Hopper expects fares to remain high while jet fuel costs stay elevated, and advises travellers to book Thanksgiving and Christmas flights before Halloween. Ms Berg said prices were likely to rise after that point.
Travellers may also be able to save by considering alternative destinations offering a similar experience, rather than limiting their search to one location.
Flying outside the busiest periods could bring further savings. For Thanksgiving, Ms Berg recommended travelling on the Monday or Tuesday beforehand instead of Wednesday, and returning on a day other than Sunday November 29.
“You can travel on Black Friday, Saturday morning, Monday or Tuesday, but you’ll pay $250 more per round-trip ticket to fly on Sunday,” she said.
For Christmas travel, she advised avoiding December 18, 19 and 20, as well as Sunday December 27, when demand is expected to be particularly strong.
Although oil flows from the Middle East have recovered to more than 75% of their pre-war levels, crude prices are expected to take longer to fall, according to Gregory Brew, an energy analyst at political risk consultancy Eurasia Group.
