Hello, Quartz Index readers!
Well, it was great while it lasted.
Earlier this year domestic US airfares dropped to their lowest level since 2009, when the US was in a recession, and business-class tickets became more affordable. But fuel prices are rising and airlines are planning to expand the number of flights they offer at a slower pace than originally planned.
That means ticket prices may soon take off.
This week Delta Air Lines told investors the tailwind from cheap fuel prices “is really behind us” and fuel prices will soon be higher for the first time in two years. As of Thursday (Sept. 8), jet fuel in the US was going for $1.37 a gallon, according to S&P Global Platts.
While airlines have reaped hefty profits from the drop in fuel prices that started in mid-2014, they’ve kept airfares low because they’re warring for customers. But when costs go up, airlines are often quick to pass that along to travelers.
Southwest, for its part, says it will grow its capacity, or the number of flights and seats it operates, at a slower rate next year than last.
If investors’ giddiness—Delta shares jumped close to 7%, and Southwest’s rose 6% over the past two days—at the prospect of higher fares tells you anything, it’s that the time to start saving for your 2017 vacation is now.—Leslie Josephs
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