Plane ticket prices at highest in seven years, airlines face staffing shortages

Yahoo Finance’s Vera Gibbons explains how oil prices are driving up the cost of plane…

Yahoo Finance’s Vera Gibbons explains how oil prices are driving up the cost of plane tickets, how airlines are dealing with staffing shortages, and how travel is rebounding.

Video Transcript

DAVE BRIGGS: As more people are looking to travel domestically this summer, Vrbo is sharing the company’s top picks of the best vacation homes in the US. I guess some people call it Vrbo now. I’m still sticking with Vrbo. This year, from the sunny beaches of Florida to the mountains of Montana, these properties are private vacation homes for families looking to enjoy some quality time together. Some honorable mentions here, Sawyer, Michigan– who knew? Santa Rosa Beach, Florida– another surprise. But this was my big take here– Gatlinburg, Tennessee. You ever been there, Seana?

SEANA SMITH: I haven’t.

DAVE BRIGGS: Didn’t even know that was a thing.

SEANA SMITH: Yeah, should go by looking at that.

DAVE BRIGGS: East Hampton, New York– we all expect it out here. This is Vrbo’s first time recognizing some of the best vacation homes, which were determined by a variety of selection criteria, including star ratings, guest reviews, booking data, and availability of amenities. But they looked like lovely homes. Sign me up.

RACHELLE AKUFFO: I mean, certainly a way to broaden your horizons, indeed. Well, summer travel is on the rebound after taking a big hit from COVID-19. But as momentum picks up, airlines are facing some major challenges. Our personal finance contributor Vera Gibbons is here with us now. So, Vera, welcome, and what’s the latest here?

VERA GIBBONS: Oh, well, have you flown in a while? It’s just a mess out there. I mean, the airports are packed. The planes are going out jam packed full. Every seat is taken. The overheads are jam packed. And that’s even if flights are going out. I mean, a lot of these flights are not even going out because of delays, cancelations, so people sitting around two hours, three hours, waiting for the plane to go. There’s all sorts of problems plaguing the industries. And a lot of it has to do with just the shortage of workers, from pilots to reservation agents to everything in between.

But on top of that, there’s also mechanical issues, technical glitches, weather issues plaguing consumers. So– and irate passengers, too. I mean, the mask thing was one thing, but now that the mask mandate has been dropped, you’d think that the irate passengers would sort of go away. That hasn’t happened, so it’s very challenging, to say the least, flying. You’ve really got to pack your patience.

DAVE BRIGGS: Yeah, they are all packed, every single flight I’ve been on. I think you may have just answered this question, but what is passenger satisfaction at the moment? Are there any airlines rising above it all?

VERA GIBBONS: Passenger satisfaction is down the drain here, as could be expected. In fact, JD Power just did a survey, showing the passenger air travel satisfaction has hit a rock bottom. Now the past couple of years, when planes were going out half full and you had the middle seats all to yourselves, you know, satisfaction was at an all-time high. Obviously, that model wasn’t sustainable. So right now, satisfaction is at an all-time low.

But there’s just so much demand for travel, that people are saying, you know what? I’m still going to travel. I’m just going to pack my patience. I’m going to leave extra early. I’m going to relax, try to be zen about it because problems are coming with the territory. But people are so desperate to travel that they’re more than willing than ever to pay the ridiculously high prices, to deal with people jamming in their bags in the overhead. I mean, they want to go. They want to go somewhere, anywhere. They just don’t want to stay home.

RACHELLE AKUFFO: But you have to wonder, though, if airlines see what people are willing to put up– pay for, are they actually going to try and improve their offerings based on these results?

VERA GIBBONS: Yeah, you’d think that would be the case. I mean, they have done some work to sort of streamline operations and try to prevent the delays and the cancelations that we’ve seen, particularly over the past couple of months. They’ve been streamlining the operations. They’ve been cutting back on the flights that are not profitable. But you’d think that they would take a cue and say, like, let’s make things better. But at this point, they don’t actually have to because that demand is unprecedented. People are willing to travel despite the circumstances.

And even so, even if they are fixing things slowly, nothing is going to happen overnight here. I mean, no more– no miracles are going to happen, and travel is going to be, all of a sudden, great again. That’s just not the case. In fact, a lot of the experts I spoke to for the piece I posted on Yahoo Finance are basically telling me, it is going to be a summer of chaos in terms of air travel.

And I was wondering, what is the tipping point for people? When are they going to say, I’m just not going to travel? Is there a price point? Is there something that’s going to prevent people from traveling? And the general take I got was, no. I want to go somewhere, primarily domestic locations this summer.

DAVE BRIGGS: Appears to be the case. Southwest, JetBlue, and Delta, by the way, the highest satisfaction, according to JD Power, at least in the economy where I fly. I got nothing going on this summer. So where are we going? Where is everybody traveling?

VERA GIBBONS: Nothing going on? Come on. I mean, you could go to one of those Vrbo places. Those look very nice. The demand really is for domestic travel. A lot of people want to go to those beach type destinations. They want to go to Las Vegas. They want to go to Los Angeles. Domestic travel is really where the action is, despite the fact that prices are ridiculously substantially higher than they were last year, and hotels are, too, and Airbnb and car rentals.

Internationally, the demand is there, but not as strong as it is for domestic travel. And, you know, you’re seeing short haul flights primarily out of the US to places like Mexico City, San Juan, Cancun. Some people are still a little bit gun shy about actually traveling internationally. So I think demand is definitely where the activity is going to be this summer and where are you going to be paying through the nose.

DAVE BRIGGS: Yeah, it’s amazing. It’s cheaper to fly to Europe for me than it is to Denver. Vera Gibbons, thank you so much. Good to see you. Have a good weekend.

VERA GIBBONS: Thanks, Dave. You, too.

https://finance.yahoo.com/video/travel-plane-ticket-prices-highest-205953720.html