On today’s episode of the 5 Things podcast:
Have you looked at the cost of airline tickets lately? One listener, Sam Kulpinski reached out after seeing the cost to fly from one side of the country to the other. She left a message asking, “why do flights cost so much?”
The amount of travel, especially around the holidays has rebounded to pre-COVID levels, but one aspect of traveling – business travelers- hasn’t rebounded as much. Could this be why flights are so expensive?
5 Things Sunday host James Brown sat down with USA TODAY travel reporter Zach Wichter and Patrick De Haan of Gas Buddy to to talk about travel and airline prices.
Not surprisingly, De Hann said the cost of fuel plays a big role in airline prices. He said there are fewer planes available right now and that is also adding to it.
For more on the cost of airline tickets:
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If you have a comment about the show or a question or topic you’d like us to discuss, send James Brown an email at firstname.lastname@example.org or email@example.com. You can also leave him a voicemail at 585-484-0339. We might have you on the show.
Hit play on the player above to hear the podcast and follow along with the transcript below. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.
James Brown: Hello and welcome to Five Things. It’s Sunday, December 18th, 2022. Go Bills.
Every week we take a question or idea and go deep. In this week, we begin in the Pacific Northwest with a mechanical engineer named Sam Kulpinski. She works for the Navy.
Sam Kulpinski: I can’t talk about much, but I help our naval vessels stay under the radar. Not really, but it’s like, how do I say it in a way that is okay to share with people? I support the Navy. I review a lot of data and try to make improvements.
James Brown: Sounds like a sneaky cool job.
Sam Kulpinski: Yeah, it’s really cool. Up until September, I lived right outside of Albany. And I just needed a change in life. And I had touched on this sort of career early right after college. And since then I loved it so much. So just needed a change in life and moved out to Seattle. I actually rented an RV and drove out to Seattle with my two dogs and my cat. But I do a lot of traveling it seems like. So that kind of leads into my question.
James Brown: A few months ago I started giving out my email in our voicemail line on the show, firstname.lastname@example.org or 585-484-0339. Sam gave me one of my favorite email responses so far. She asked an interesting question.
Sam Kulpinski: I’ve noticed that airline prices have gone up significantly since COVID. We also had a huge increase in the cost of gas. So I was just wondering if those two things are related. Assume some of it’s the fact that the market changed quite a bit. But when I looked at flights to fly home for December, they were over $1,300. And it’s outrageous for economy class to fly from Seattle to upstate New York and just not worth the money. So yeah, I kind of just wonder, are the cost of airline prices directly related to the increase in fuel? And how much of the price is still being affected by the airline industry recovering from COVID?
James Brown: Turns out Sam’s intuition was not far off the mark. Zach Wichter, travel reporter for USA Today, says the amount of travel, especially around the holidays, has rebounded to pre-COVID-19 pandemic levels, but there have been some pronounced changes.
Zach Wichter: In terms of the in-flight experience, I think most airlines are pretty much back to the service flow they were offering before the pandemic. I mean, there may be some small adjustments, but it’s pretty similar. If you’re on an airplane, it’s going to feel like a normal trip. It’s not going to have that same 2020 feeling where everyone is shut down. There isn’t food service, that kind of thing if you’re on a flight that would otherwise have food service.
The main thing is really more of a business story. It’s just that fewer people are traveling for business now. It affects their business model essentially. A lot of airlines really cater to business travelers as sort of their core constituency. And leisure travel was always a big part for every airline, but wasn’t kind of their main market for a lot of these big carriers, especially the major airlines, United, Delta, American. Spirit for example, is more of a leisure-focused airline, so the story right now is a little different for them.
But what that means is a lot of airlines are really changing their strategies and it may be adding flights to more leisure-focused destinations that they didn’t previously serve, changing kind of the types of aircraft that they are sending to certain places in order to have more or less seats in line with whatever the demand is. And then also just as people who work for a living, we can see this ourselves. Pre-pandemic, I was working for another company, but I was just doing a lot more traveling. I was still a travel reporter and I was out in the field a lot more. Now, a lot more of what I do happens from my desk, and I think that a lot of people who work have that same experience. You don’t need to be out there because we’ve all gotten so used to being on Zoom or Teams or something like that. So the demand for travel from the corporate side is just really different now.
James Brown: I had the same change in my life. I was working for a different company and I was on the road all the time. And right now we are over a video conference, for our listeners’ sake. I’m assuming some of that travel is replaced by Zoom’s video conferences. I wonder, within the industry, do they see those tools as an enemy?
Zach Wichter: I don’t think they see them as an enemy, but I do think that airline executives are pretty clear-eyed about the fact that Zoom is here to stay. So you hear a lot on airlines earnings calls where reporters like me or analysts who are asking the airlines about their future business plans, you’ll hear people asking about how much of a competition do you see from Zoom?
And the line or some version of this is what a lot of the executives have said is, “We recognize that Zoom is here to stay, and yes, it’s probably going to change business demand.” But we also all experience in our own lives people still want to be in the room with each other. And so just from what I’ve heard, airline executives are pretty bullish that business travel is going to, if not fully bounce back to pre pandemic levels, it’s still going to remain a key part of their business because their expectation is that both for work and for leisure, people are going to want to be back out in the world. If you’re doing a big business deal, you want to actually be able to shake the person’s hand and not just talk to them over Zoom.
James Brown: Demand isn’t the only driver of the price of a flight. Fuel prices play a big role, too.
Patrick De Haan: Because airlines burn incredible amount of jet fuel.
James Brown: That’s Patrick De Haan. He’s one of the top experts on gas prices in the country. Since 2005, he’s tracked oil markets including crude oil, gasoline, diesel, and jet fuel. On Twitter, he is known as the Gas Buddy guy. Not surprisingly, he works for Gas Buddy. That’s an app that tracks, you guessed it, gas prices.
Patrick De Haan: Obviously, they’re going to have to charge prices that are reflective of the cost of fuel. That is the more jet fuel costs, especially this year because it’s been extremely expensive, airlines are going to have to charge more to recoup their expenses.
James Brown: Patrick says some of the increased cost comes from disruptions caused by the COVID-19 pandemic and choices made by big players in the industry.
Patrick De Haan: Part of the problem with why airline tickets are more expensive is jet fuel. But the bulk of the challenge is probably just they don’t have as much capacity, so they can charge more. They have more pricing power.
James Brown: He says there’s not just fewer flights. In some cases, there are fewer planes as the industry switches to a more fuel efficient variety of aircraft. This is a process that’s been going on for years.
Patrick De Haan: There’s a lot of jets that have been permanently removed from service. American has permanently retired its 757s, 767s. And a lot of airlines like the Airbus A380, the world’s largest plane, a lot of airlines have parked their biggest oldest planes. So it’s more of a story. In my opinion, airline tickets are very high because of a less capacity, less seats available. Plus jet fuel is also playing a small role there.
James Brown: Zach Wichter, USA Today Travel reporter, says there’s another piece to the equation.
Zach Wichter: But also I would note, if Sam is trying to fly from Seattle to Albany, that may just be an expensive route in general, because Albany is a smaller airport than some of the other airports in the state of New York and kind of the surrounding area. And so when you take a flight, and I’m assuming from Seattle, I don’t think that there are any direct flights from Seattle to Albany. So Sam is probably going to have to connect somewhere. And when you get into booking a ticket like that where you’re flying cross country and then connecting onto a smaller plane to go to this smaller airport that may only have a couple flights a day from certain airlines, it can actually be more expensive to do that just because same thing, supply and demand. And that may be a pretty heavily traveled business route, so businesses may be willing to pay the price that a regular consumer wouldn’t be willing to pay.
James Brown: To your point, I took a flight from Rochester, which is about an hour, hour and a half from Albany to Seattle earlier this year, and I had to stop, I believe, in Denver in order to get there. Are connection flights generally more expensive than direct flights?
Zach Wichter: No. A lot of the time it’s really a mixed bag, frankly. A lot of the time, connecting flights can be cheaper, especially if the airline is pushing you a connecting itinerary that also has direct or nonstop options. In those cases, choosing the connecting itinerary can be cheaper, but in cases where you’re going from a small market to a big city like Albany to Seattle, Rochester to Seattle, and there are no direct flight options, those are often more expensive, again, just because of supply and demand.
James Brown: As for Sam, I caught up with her a few days ago and shared what Zach and Patrick told me.
Sam Kulpinski: I mean, that makes sense. It adds up. Definitely didn’t consider that before. And it’s surprising in a way that business definitely drove the market, but also surprising because that’s not usually the first thing I think of when it comes to getting on a plane.
James Brown: I’ll leave it to you. Any famous last words?
Sam Kulpinski: Well, I’m just glad to be out of the pandemic and being able to fly again, kind of travel, whether for work or to see my family, that’s for sure.
James Brown: I certainly hope you get back here and you get to see them.
Sam Kulpinski: Thank you. Actually, I was just going to say, I’m actually about to get on a flight right now, so kind of ironic that we’re doing this episode this week.
James Brown: Wow, awesome.
Sam Kulpinski: Yeah.
James Brown: Well, happy trails. Safe passage. We’re hoping for the best for you.
Sam Kulpinski: Awesome. Well, thank you so much, James.
James Brown: If you like the show, write us a review on Apple Podcasts or wherever you’re listening. And do me a favor, share it with a friend. What do you think of the show? Email me at email@example.com or leave me a message at 585-484-0339. We might have you on the show. Thanks to Sam Kulpinski, Patrick De Haan and Zach Wichter for joining me. Thanks to Shannon Ray Green and Alexis Gustin for their production assistance. For all of us at USA Today, thanks for listening. I’m James Brown. And as always, be well.