Why flights are so expensive lately

Yahoo Finance Live anchors discuss why flights are so expensive lately.

Video Transcript

BRIAN CHEUNG: As summer officially kicks off this weekend, more people may be staying close to home, instead of flying, as prices for flights continue to increase. Going rate right now about $400 for a round trip domestic flight, according to Hopper. You can see that's much higher than it was the last two years understandably. But, Akiko, I know you and I are not flying for this Memorial Day weekend, but--

AKIKO FUJITA: I don't typically fly for Memorial Day.

BRIAN CHEUNG: I think it's a mess to try to fly during the holidays.

AKIKO FUJITA: It is, but, you know, I was thinking about this. Is it one of those holidays-- Labor Day, both, you could sort of swap, right? Because they bookend summer. Is it a flying holiday? Is it a driving holiday? And either way you look at it, it is about fuel prices, fuel prices going up, as your ticket price is going up as a result of fuel prices getting baked in, but also with gas prices up, too.

And there was some data that came out today pointing to the fact that gas demand is at its lowest in nearly a decade. Obviously, you take out what happened in 2020 when the entire world shut down. But if you look at that, I mean, that's starting to point to consumers saying, well, maybe I don't need to make that extra trip, whether it's that trip on a daily basis or that road trip, because it costs a lot of money to fill up on gas right now.

BRIAN CHEUNG: Oh, absolutely. And I think that when we talk about airline fares, yes, you bring up the absolute important point, which is that a lot of people are, if they're not flying, still trying to drive somewhere. And when you look at prices at the pump right now, you're probably saying, ugh, I don't know if I need to go that far. Some people who are at the airports noticing the high prices for their ticket, wondering if they need to be the ones to supply the jet fuel.

But look, at the end of the day, I think it just really kind of changed a bit of the consumer behavior here in terms of thinking about, is that a person that's worth traveling for? Is this someone I've already seen? I mean, we know that people are traveling a lot. That demand is the reason why these airlines are able to increase these prices, as well as the fare cost, or rather, the cost of the fuel itself. So people have been flying around. I guess, the question is whether or not they want to do that during this weekend.

AKIKO FUJITA: By the way, going back to that tweet, ticket prices are always high during Memorial Day, right? I mean, we're talking this year--

BRIAN CHEUNG: It is.

AKIKO FUJITA: --they are especially high. You know, no question about that. But this is not really the best time to fly if you're looking for discounted prices.

BRIAN CHEUNG: No, especially if you're doing the Friday to Monday. I mean, that's--

AKIKO FUJITA: Yeah, but what's interesting to me is to hear these two countering narratives. One is, costs are going up, whether that is the cost of food for your barbecue, the cost of travel, the cost to drive somewhere for a road trip. And yet, there is still a lot of enthusiasm, and then still pent-up demand. People still want to be able to consume these experiences because of what's played out over the last two years. And you wonder in a holiday like this, which one is stronger.

BRIAN CHEUNG: Labor Day or Memorial Day?

AKIKO FUJITA: Well, no, just, is it about the cost savings because you're getting hurt so much in terms of that, or is it about this desire to still go out because you simply haven't done that kind of travel over the last two years?

BRIAN CHEUNG: Yeah, I mean, for me, personally, I've always preferred to not travel on Memorial Day, just because, first of all, it's always a mess to try to travel during these big traffic holidays. But then, secondly, it's always my birthday week. I don't know. I don't know if everyone knew that it was my birthday week.

AKIKO FUJITA: How many times have you mentioned your birthday?

BRIAN CHEUNG: This is only the second time I've mentioned it today, at least. Even when my birthday was two weeks--

AKIKO FUJITA: It is your birthday week. You're still allowed to celebrate, yes.

BRIAN CHEUNG: It's actually birthday year. But anyway, with the-- but I never travel because I want to stay where I am at, I want to celebrate with my friends. You know, so I always try to treat Memorial Day as that. Labor Day is my travel, is my travel day.

AKIKO FUJITA: And are you going to be celebrating throughout the weekend?

BRIAN CHEUNG: I will. Yeah, I think I'm going to have a grill--

AKIKO FUJITA: There's still three more days. Is that your birthday week?

BRIAN CHEUNG: I think I'm going to have a grill-out. Yeah, although the hot dog prices are so high, I'm wondering if I should arb it by buying a bunch of Costco $1.50 hot dogs. That might be cheaper.

AKIKO FUJITA: That's actually not a bad idea.

BRIAN CHEUNG: That might be cheaper than buying the buns and the hot dogs themselves.

AKIKO FUJITA: You're right, you're right. You get the drink with it. It's $1.50. You just do a massive order from Costco.

BRIAN CHEUNG: And what is up with the fact that-- you're probably wondering, oh, my God, what is Brian going to say here?

AKIKO FUJITA: What's going to come next?

BRIAN CHEUNG: Hot dog buns come in different quantities than the hot dogs themselves.

AKIKO FUJITA: Yes, that has been an age-old to me.

BRIAN CHEUNG: Riddle me that.

AKIKO FUJITA: Yes, that has been-- that's not something that came up recently, but that has been a debate for some time.

BRIAN CHEUNG: I mean, it's--

AKIKO FUJITA: It's a fair question.

BRIAN CHEUNG: It's a huge problem. I'm not going to buy five packs to even out the distribution here. [SIGHS] We'll leave it.

AKIKO FUJITA: What do you do with the leftover hot dog buns?

BRIAN CHEUNG: I-- leftovers is never a problem. But anyway, I'll stew over that for the long weekend.