Airline ticket prices are up 25%, outpacing inflation — here are the ways you can still save

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While inflation has regularly made headlines lately, with many pointing to the roughly 8% figure from the Consumer Price Index, there are still several consumer spending categories surpassing it, including the price of airline tickets. In the last year, the consumer price index for airline tickets has shot up by 25% — the largest jump since the Federal Reserve of St. Louis began tracking the index in 1989. In April alone, airfares spiked 18.6%, according to the Bureau of Labor Statistics.

Regardless of soaring prices, Americans aren't hesitating to break out their credit cards and book a trip. A recent Bank of America Institute survey showed spending at airlines and travel agencies is up a whopping 60% year-over-year. At the same time, as Americans continue to grapple with 40-year high inflation rates and resource-strapped airlines work to get more planes in the air, traveling on a budget seems to be nearly impossible.

Below, Select details the current state of airline prices and what consumers can do to find deals for their upcoming summer travels.

Since the beginning of the pandemic, many airlines have been drowning in debt and struggling to return to a state of profitability. Now, with travel restrictions easing across the world and higher operating costs to deal with (like higher jet fuel prices), airlines are salivating to serve travel-deprived consumers — and for a major profit.

As a result, ticket prices are near all-time highs at the moment. For starters, there are simply not enough seats to provide for how many people want to fly. Henry Harteveldt, travel industry analyst at Atmosphere Research Group, tells Select that while travel demand has come roaring back, seat capacity is still down 6% compared to pre-pandemic numbers. Additionally, consumers aren't the only ones facing high gas prices at the tank — the airlines are feeling it, too. According to IATA, the price of jet fuel has increased nearly 150% in the last year. Airlines are also facing the reality of not having enough pilots and flight attendants to run their flights, as well as higher labor costs. All of these forces have combined to create rising ticket prices. Harteveldt refers to this as, "market forces at work."

Desiree Anderson, 28, recently booked a round-trip flight from Los Angeles to Philadelphia and paid $685 for an economy ticket. She tells Select that in the past, that same ticket would cost roughly $320, expressing her frustration by saying, "for those prices, I should be able to fly internationally round-trip." Anderson iterates her frustration as an avid traveler, saying that because of skyrocketing flight prices and the rising cost of living, she's had to cut back on leisure travel and is only making trips for weddings she's a bridesmaid in.

Unfortunately, Harteveldt indicates these kinds of high ticket costs are expected to last throughout the summer as oil prices continue to climb. Luckily, there are several tools available to help you save money on your future travel plans.

Two years after the pandemic's economic shockwaves, the airline industry is largely changing its pricing models, according to Harteveldt. Now, the 'rules' of finding affordable travel have changed. If you're hunting for affordable travel in the coming months, here's where you can get started.

Consider using a travel agent

Travel agents may feel like a relic of the past, but now it seems this underrated industry is experiencing a resurgence, largely due to countries quickly and constantly changing their Covid-19 travel restrictions. As a result, consumers are flocking to travel agents as a trusted and reliable source of verifiable information.

Aside from their many useful resources, travel agents can also help you save a decent amount of money by booking vacations packages. Harteveldt told Select he's seen discounts up to 10% off retail prices simply by booking through an agent, especially since "not all fares are publicly available."

Note that those with AAA or AARP memberships have complimentary travel agent access. If you happen to have a Costco membership, consider visiting the Costco Travel website for more deals.

Be flexible and plan ahead of time

Prior to the pandemic flexibility when booking travel was the key to saving money, but now, even more flexibility is needed. Consider traveling to an alternative airport for a cheaper fare. For example, if you're flying internationally, it could be worth driving or taking a train to a nearby airport to score a better price overall.

It might also be worth flying with a budget airline, especially as the U.S. now has six low-cost carriers: Spirit Airlines, Frontier Airlines, Sun Country Airlines, Allegiant Air, Breeze Airways and Avelo Airlines. Note that these will be no-frills flights and you'll have to pay more for extras (including carry-on bags), but if you can fly with a small amount of luggage and sacrifice luxury for a few hours, you could potentially save hundreds of dollars.

If at all possible, consider putting off travel until the fall or winter months. Scott Keyes, founder of Scott's Cheap Flights, tells Select there are affordable flights readily available after Labor Day in the $400 round-trip range. He also recommends booking within the "Goldilocks windows" for best pricing, which for domestic travel means 1–3 months ahead and for international travel, 2–8 months ahead. With this ideal timing in mind, he urges those who wish to travel for Christmas or New Year's to begin booking flights now.

Domestic travel is surging, so consider traveling abroad

For those looking to save money, Keyes recommends pulling out your passports and heading overseas. Domestic travel is extremely popular right now, especially since there is still a mandate in place for American travelers to present negative Covid-19 test results before returning to the U.S. He says this is keeping Americans within the U.S., as they don't want to risk the possibility of testing positive and being stuck in a foreign country for an extended period of time.

This trend also happens to be keeping international travel down 20-40% compared to pre-pandemic levels, leaving a great opportunity to score affordable flights abroad. Keyes specifically recommends Europe as a place to travel for the best savings at the moment. Plus, the dollar to euro exchange rate is currently at it's most favorable point in years for U.S.-based travelers — meaning your dollars will go even further in Europe than they did in years past.

Redeem points and miles

Now is arguably one of the best times to use the points and miles you've earned by traveling or from having a trusty travel rewards credit card in your wallet. While award prices have also been on the rise lately, money staying in your wallet is always the best solution.

For example, I recently looked into booking two round-trip flights from Fort Lauderdale to Las Vegas for the Fourth of July. With Southwest Airlines, the retail price was showing as nearly $1,500, however I was able to pay just $22 out of pocket for both tickets. Here's how:

I applied for the Southwest Rapid Rewards® Plus Credit Card when it had a welcome bonus that included the valuable Companion Pass + 30,000 miles (offer no longer available). After meeting the minimum-spending requirement of $1,000 within the first three months of card membership, I was able to transfer some of the Chase Ultimate Rewards® points I'd earned through my Chase Sapphire Preferred® Card (see rates and fees) to my Southwest account and have enough Rapid Rewards points to book one flight. From there, I used the Companion Pass for my partner's flight and spent a total of $22 in fees to redeem my points.

While this is just one example of how you can earn points and miles and fly for nearly free, there are plenty of other great travel rewards credit cards out there to help you offset skyrocketing flight prices, including the following options. Just the welcome bonus alone from these cards can get you over $750 in travel if you use your points right.

For instance, you can use the 75,000 points from the Chase Sapphire Preferred® Card's welcome bonus (after spending $5,000 on purchases in the first 3 months of account opening) to book travel through Chase Travel℠ (including airfare, hotels, car rentals and cruises). Or you could transfer those points to British Airways to book flights on its Oneworld partners, American Airlines or Alaska Airlines, and book domestic U.S. flights. You could book three round-trip tickets on American Airlines from New York to San Francisco for 78,000 British Airways Avios points — but if you were to pay cash you'd pay over $2,000 during many dates this summer.

Lately, everything has become dramatically more expensive when it comes to travel. From airline tickets to hotels and rental cars, there is nearly no escape from rising prices, but with the right strategy, there are ways to easily cut costs so you can still enjoy your summer vacation.

Most importantly, it's important to maintain a budget throughout your travels. While the idea of taking a trip is extremely enticing after more than two years of pandemic-related restrictions, it's always important to spend within your means, fill your emergency fund and invest for the future.

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