Travel expert: Expect more airline ‘disruption, delays, and cancellations’

Hopper Lead Economist Hayley Berg joins Yahoo Finance Live to examine the outlook on the travel industry ahead of the summer travel season, factors that have American families delaying trips, rising gas prices, and trends in booking domestic trips and finding the best deals.

Video Transcript

- Surging demand is putting pressure on airlines. And they're struggling to keep up. Thousands of flights were canceled over the long weekend or delayed due to staffing issues and weather. Well, we want to bring in Hayley Berg, a lead economist at Hopper, to help us break down what we could expect this very busy summer travel season. So there's lots going on, Haley. When we talk about booking flights, we know airfares are up about 18% from where they were those pre-pandemic levels. Weekend after weekend, it seems like we're seeing thousands of flights canceled or delayed for various reasons. How do you think this is going to impact demand here over the next couple of months?

HAYLEY BERG: So we've seen a huge surge in both delays and cancellations of flights, really since mid-May. But the positive side is that we've not yet seen it slow down booking demand. What we have seen is that more and more customers are adding flight disruption products, products that protect them if they miss a connection or if there's a significant delay. So disruption is not yet slowing down demand. But we are seeing consumers willing to pay a little bit more for peace of mind that they'll get to their destination on time.

- Hayley, where does the summer travel season officially peak? And do we expect matters to get worse before they get better?

HAYLEY BERG: Flights will continue to peak for the next couple of weeks. We see significant demand and really high volume of travelers over these long weekends. So upcoming 4th of July, we can expect continued disruption, delays, and cancellations. But the good news is that many airlines have proactively reduced their schedules for the remainder of the summer, proactively canceling flights that would have caused more delays or would have been disrupted. So our hope is that we'll start to see these really big numbers, about a third of flights being delayed, about 4% being canceled, come down in the next couple of weeks as schedules have a little bit more room for airlines to move in.

- So, Hayley, if you're out there, you want to take a summer vacation, you haven't booked anything yet, are there still deals to find?

HAYLEY BERG: There are, yes. And if you're flexible, that's how you're going to save the most money. Right now, airfare is about $390 for a domestic ticket this summer. But if you can wait and travel in the last two weeks of August, you can save about $120 per round trip ticket. Think about a trip internationally. New York to London. You can save about 34% if you delay that trip until September. So great deals available if you can be a little bit flexible about when you fly.

- That is the exact hole in my summer. Thank you, Hayley. Where are we flying? Where should we go if we're looking for a deal? There are specific destinations that are more affordable.

HAYLEY BERG: Absolutely. There are many cities, major American cities, Las Vegas, Salt Lake City, and Denver, where on Hopper, we're seeing airfare under $100 from major American cities if you go on the right weekends. And internationally, South, Central America and Mexico offer really attractive prices. Airfare to Europe right now is over $1,000. But if you stay a little bit more local, fly regionally to San Juan, Puerto Rico; Cancun, Mexico, you'll pay less than $300 or $400 for a round trip ticket this summer.

- Hayley, the search trends that you've been looking at on Hopper, have they changed at all over the last couple of weeks as people are facing higher and higher prices, not only when it comes to travel and airfare, but also just in their everyday life with gas prices, food prices, and the list goes on?

HAYLEY BERG: We have definitely seen travelers staying closer to home. And domestic trips are typically less expensive, about $300 or $400 less expensive, than some of those longer haul international trips. I think we'll continue to see travelers choosing to stay domestic, looking for more bargains and deals when they fly. But despite these higher prices, we've not yet seen demand slow. People are eager to travel this summer.

- And because of that desire for lower prices, eight new low-cost airlines have popped up since 2020, which is extraordinary. Are we finding those deals on Hopper, on traditional websites? Or do you have to go specifically to those airline's sites?

HAYLEY BERG: Depends on the airline. But on the Hopper app, you can definitely find all of the new low-cost carriers. Most of those carriers are flying out of more regional airports, which is great for travelers who are looking for a deal and willing to either drive a little bit further to a more remote or regional airport to get a really great deal on one of those low-cost carriers. We also typically see, when a carrier enters a route, they'll offer promotions and typically lower the average price on that route, a low-cost carrier, by about 20%. So those are airports that have offered new service from these new airlines are definitely prime for deal seekers.

- OK, Hayley. This is a tough one. I don't know if you saw the viral story over the last couple of weeks about the design concept that's been floated by a student turned entrepreneur of a double decker internal plane system where there's someone essentially sitting right on top of you. Have you seen those images? And do we think we'll see that come to the United States?

HAYLEY BERG: I have seen those images. No word yet on whether anyone's going to build that plane. But I do hope we'll continue to see innovation in the aviation space and what airlines offer to travelers, whether it's a double decker option or just more in-flight entertainment.

- Oh, come on. You'd fly in that system?

HAYLEY BERG: Hey, if it was a great deal and it got me where I wanted to go, I might.

- Wow.

- Good for you. We all opted out of that.

- Yeah. Maybe we should reconsider. The travel expert is telling us she's going to do it All right, Hayley.

- Hopper lead economist Hayley Berg. Appreciate your insights. Thank you for joining us.