Why Cheap Airline Seats Are Getting Harder to Find
Travel demand wobbled earlier this year when consumers grew nervous about the health of the economy and the data-vars-anchor-text="potential impact">potential impact of President Trump's sweeping tariffs. As people scaled back their travel plans, airlines that had planned lots of flights were left with too many seats, especially for domestic routes. Carriers offered cut-rate tickets in an effort to fill flights.
Now, airlines say bookings have started to pick up again. More passengers were screened at U.S. airports in July and so far in August than in the same months in 2024.
At the same time, airlines are working to claw back pricing power by shrinking their coming schedules, an effort to better match supply with demand and protect profit margins. (Flying planes with lots of empty seats or selling them at a steep price cut are money-losing propositions.)
'Just as quickly as demand stepped down in early February due to this uncertainty, it appears that demand is now stepping up,' United Airlines Chief Commercial Officer Andrew Nocella said last month.
Dean Gordon has felt the change. He usually starts shopping for nonstop flights around this time of year to attend a trade show held in January.
In July 2024, he and his wife together paid $606 for round-trip economy tickets between Miami and Los Angeles. The total was a few hundred dollars cheaper than they have paid in the past, Gordon said.
This year, fares for the trip on the same airline have skyrocketed to more than $1,500 for the couple.
'That was kind of a shock to me,' said Gordon, who has a business making custom electric guitars. He isn't sure it will be worth making the trip in 2026. 'Everyone is suggesting I wait a few months to see what happens.'
Airlines have also started to see the limitations of deeply discounted promotional offers, Frontier Airlines Chief Executive Barry Biffle said. Deals can juice sales, but not enough to cover costs like taxes and airport fees, he said. The airline is now seeing double-digit percentage increases in revenue per passenger.
'I think the industry has figured out that 79 [dollars] is the new 49 and 99 is the new 79,' he said on Frontier's quarterly earnings call earlier this month.
Still, airlines may be overly optimistic about their ability to charge more, said Brett Snyder, who writes the Cranky Flier industry blog and runs a concierge travel service.
'I don't think the window is closing for cheap fares,' Snyder said. Travel demand has stabilized, but may not continue growing at a fast clip. And the industry is heading into a time of year when leisure trips tend to slow down anyway, he added. 'Once you get back into the reality of post-summer, I think it becomes a very different situation.'
And some industry observers aren't convinced carriers will remain disciplined about paring back their schedules. Some might be tempted to add more flights next year to bring in much-needed cash, said TD Cowen analyst Tom Fitzgerald. That could mean fares could come down again before long.
'I wouldn't be shocked if we do see a little bit too much supply next spring,' he said.
Write to Alison Sider at alison.sider@wsj.com
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