The other day, I sat down to book a flight to Cabo for a friend’s bachelorette party. I thought it would come out to 500. I felt so naïve when the total was almost 1000 dollars. What was crazier to me was that half my ticket price was made up of fees and taxes. I decided to do a little research and see what the cause of all these extra fees were and why I have been paying so much extra for my airline tickets recently.
Why has the prices of flights increased?
Some reasons the price of your airline ticket has become significantly higher are:
The price of oil—each barrel costs $100. In 2008, each barrel of oil reached a high of 150 dollars, but now remains at around $100. In 2001, fuel was only 10 percent of the airline industry’s operating costs and today, it consumes about 35 percent of their budgets. Airlines pay $3.16 per gallon of jet fuel today compared to the 78 cents they paid back in 2000. So, pretty much, the price has quadrupled for airlines, which is a huge reason why that airline ticket price keeps going higher and higher.
Capacity control has also had a huge impact on the rise of ticket prices. “If you reduce supply relative to constant demand, then you can push up average fares because then you are not carrying the most price-sensitive traveler,” said Seth Kaplan, managing partner of Airline Weekly, a publication that covers the industry. “That’s what airlines have basically done. It’s a larger industry but there are not more domestic seats in the air.”
Competition– it’s cheap to go from Boston to the West coast, but extremely expensive to get to place in the middle of the country because there is more competition and demand for those routes.
Fees for things like fuel surcharges make your airline ticket more expensive. After 9/11, airline tickets also went higher. There is a so called 9/11 fee that finds airport security. When you purchase your ticket, notice that half of the price of your ticket goes to taxes and fees. Currently, these are the fees that are being added to your airline ticket:
- September 11th Security Fee of $2.50 (up to a maximum of $10 per round trip)
- Passenger Facility Charge of $4.50 per segment (up to a maximum of $18 per round trip)
- US Federal Domestic Segment Fee of $3.70 per segment
- US Travel Facilities Tax of $8.20 per direction (only applicable to flights to/from Alaska and Hawaii and the 48 contiguous US states or between Alaska and Hawaii)
- US Immigration User Fee of $7
- US Customs User Fee of $5.50
- US APHIS User Fee of $5
- US International Transportation Tax of $16.30 per arrival or departure
- Foreign government security/tourism/airport/international transportation taxes and fees of up to $290 (varies widely by destination and fluctuates with exchange rates)
Flight distance is not always the factor with how cheap your ticket will be. There are several factors that contribute to ticket prices, and distance is only one of them.
The timing of purchase and timing of your your flight can be a huge factor in the price of your ticket. This is common sense, but if you buy your ticket last minute, you will be paying A LOT more. If you book your flights for holidays like Thanksgiving, Christmas, or New Years, you will be paying a hefty amount for your airline ticket. And don’t forget summer vacation. The prices for airline tickets are always higher between the months of June and August.
How to buy a cheaper airline ticket?
1. Purchase on tickets Tuesdays, Wednesdays, or Saturdays. Don’t purchase tickets on holidays. Be flexible with when you purchase your tickets.
2. Buy your ticket in advance (at least 30 days before your flight) and three weeks before for domestic flights.
3. Be flexible.
4. Consider going to a secondary airport in a major market.
Check out this blog for more tips on when to purchase your plane ticket.
