5 Secrets Behind Falling Airfares in 2023, And Why Business Class Is Now A Bargain

There have been a lot of stories about airfares going up. They’re the same stories about people owing more on credit cards than ever, and about the price of eggs. You have to adjust for inflation. While you may be paying more for an airline ticket, the real cost of air travel is down. Interestingly, business class fares to Europe are actually down even in nominal terms.

According to data from Cirium, the price of U.S. domestic airfares are up 9% versus 2019, while inflation is up 19%. That means tickets are cheaper in real terms. (Ticket prices in Europe are up more than in the United States, but still lag inflation.)

Moreover, the nominal cost of U.S. domestic fares fell 4% in the second half of 2023, as inflation moderated.

  1. U.S. domestic airfares were $179.25 in 2023, up 9% over $163.63 in 2019, but substantially less than the 19% increase in CPI-derived inflation. Real airfares were lower in 2023 than they were before the pandemic.

  2. Airfares fell year-over-year starting in August 2023, and were actually 9% lower in nominal terms in December 2023 than they were in December 2022. This is because inflation moderated and no longer buoyed airfares, which had already been falling in real terms.

  3. In contrast, in Europe nominal airfares rose 8% in 2022, to a level 12% higher than in 2019. The same overall inflation adjustments need to be made, but consumer savings aren’t as stark.

  4. Transatlantic coach fares were up 14% against 2019, still less than inflation. However the difference wasn’t as stark as with domestic fares, because transatlantic capacity was slower to recover from the pandemic than domestic capacity.

  5. Interestingly, Cirium found that business class has actually gotten cheaper. I’d posit this as
    the result of premium leisure supplanting much business travel in the forward cabin.

    [T]ransatlantic business class airfare is 3% lower compared to 2019, with December 2023 business class fares 7% lower compared to December 2019. The average business class fare in 2023 was $1,845.

    Domestically, of course, first class can be cheaper than ever.

While there were spikes in airfare as demand patterns shifted during the pandemic and recovery, and airlines in many cases were slow to rebuild capacity as a result of shedding workers (despite government subsidies ostensibly meant for them not to do so), much of those spikes were either changes in relative prices (increases on some routes offset by decreases elsewhere), driven by inflation, or… transitory as capacity did eventually recover.

Boeing delivery days (and to a lesser extent, Airbus delays) could limit supply of seats, which holds the potential to reverse this trend.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Found a ANA business class ticket last night cheaper than D1 to HND. Gotta fly United on the domestic leg but I can live with that.

  2. I’m not who our there is making 19% more than they did in 2019, or even year’s before that Gary. We ALL are “poorer” than we were before the pandemic.

    Also, 3% lower is hardly something to “write home about”.

    Lastly, I fly alot, Luke many readers here do. Not sure if I’m just not “Saavy” like yourself, but ALL of my fares are much higher than they ever have been. Maybe dummies like me than consistently overpay are subsidizing your cheap buy ups to first class (that I’ve literally never seen or been offered).

    Data Point: Paid $3300 to fly RT in Premium Economy from DFW to FRA this week. It “used” to be around $1200 and Biz was around $2500. AA wanted $9000 to $13000 depending on the date pattern I needed to travel in. I have consistently experienced this over the last 2 years, traveling to Geneva, Munich, Basel, Madrid, Zurich, and now Frankfurt (even as high as $18000 one time for Biz).

  3. Faulty comparison to compare discounted US domestic saver fares to business class anything.
    As suggested previously and has been the case all year using cash or miles for European destinations have doubled in the amount of cash required and tripled in the amount of miles required.
    Fuzzy math to try and get more concessions from Government- poor airlines can’t make any money because of their disgusting product quality that are peddling as luxurious.

  4. @Gary: “I’d posit this as the result of premium leisure supplanting much business travel in the forward cabin.”

    How many seats were offered in each class in each year?

  5. Gary what stupid commentary to compare price increases versus inflation. Just stupid.

  6. What are you smoking Gary? Last year it wasn’t that hard to find discount fares. We flew round trip SFO-Rome for $2500 in Club on BA and $2300 SFO-Morocco on AF. This year it’s a struggle to get premium economy in that range, ex-SFO.

    Maybe the airlines are selling less J and C fares but they’ve gotten much smarter about selling deep discount fares (P on UA)

  7. Gary, anyone can find a graph or data point for anything. Also, if 40 million minimum wage earners all get a 50% percent raise ($7.50 to $15) that would throw of the graph you used and a bunch of stats. Sure, is a large percentage of the population making more: yes. But besides a few industries/positions, I STILL stand by my statement that most Americans are “poorer” now.

    Question: Are you making 19% more on your CC referrals? Ads? Or when you emcee an event are they paying you $5000 instead of $4000 now? I highly doubt it. I’m also self employed and many clients are paying the same if not less than they were in 2019 and everything costs much, much, MUCH more now.

  8. @Esquiar – “What are you smoking Gary? Last year it wasn’t that hard to find discount fares. ” And this is data about last year, so you aren’t even disagreeing with me?

  9. You always see someone making or showing a “chart” to explain their point of view. Rarely are these charts showing the whole picture and they are used as vindication for the point they are trying to make. The reality about past and present costs is this; ever since 2021, inflation has overtaken any and all supposed gains that rising wages have made. The current moronic administration has imposed guidelines and laws that “feel” good and made for the unskilled, lazy, uneducated, self centered liberals that are being produced in the mindless schools and colleges – all at the expense of the employed tax payers. All the current administration knows to do is spend, spend, spend, give away, absolve legal debts – all in an effort to buy votes. They have set up America to fail for when the bill for their corrupt actions come due – and the morons who are “benefitting” from these handouts are too ignorant and uncaring to recognize what is happening.

  10. I have found the advance-purchased domestic F fares on UA to be dirt cheap this year, as long as they aren’t on widebody aircraft. Consequently, upgrades basically don’t exist, but why should they? Airlines should be selling 100% of first class if they are pricing correctly.

  11. @ David R Miller — The morons were in in the prior administration. Ever heard of PPP? Biggest waste of taxpayer money in history and fueled the excessive inflation we HAD in 2021 and 2022. In case you don’t understand the definition of inflation, it has returned to historic norms.

  12. @Gene, The reality is that either administration would have come up with the PPP bailouts which were far too generous to companies who didn’t even need them. But mix in the tax cuts prior with PPP during the Trump administration and it was a recipe for disaster that is taking years to get out of. And yes, credit where credit is due, Biden handed out some money at the end of Covid as well. It was out of hand all the way around. It will take years to settle it all down.

  13. @Gene I agree on domestic, but Intl is still absurdly priced for a good part of the year in premium cabins. At some point they need to wake up and realize that there is a sweet spot between outrageous J fares out of Asia, Europe and S.A. and discounting them properly to an in between to avoid giving out seats to $700 economy ticket passengers using plus points. I am fine paying $2K-$3K for a r/t to Europe in J. I am not fine paying $5K. Let’s hope what they learn with domestic F starts influencing the pricing on Intl J as well.

  14. Business class between cities in Europe is economy with an empty seat in the middle. Not worth extra cost

    Business class between most cities in North America is a watered down product that I would never pay more money for and I’m Executive Platinum on AA

    Business is valuable internationally for flights greater than 4 hours. Otherwise meh

  15. Nobody told me. We are still paying almost double pre pandemic for international business tickets.

  16. Bag fees are up. Seat fees are up. Food at airports is up. Amount of space on a plane is down, especially at AA (more planes converted).

    The fare covers less and less of the total cost of transportation. It would be weird if it didn’t go down. But what counts, the TOTAL cost of flying, is definitely up.

  17. @BenG “..if 40 million minimum wage earners all get a 50% percent raise ($7.50 to $15)…”

    Your example ($7.50 to $15) is a 100% raise, not 50%.

    @BenG “I’m also self employed and many clients are paying the same if not less than they were in 2019…”

    I’m paying consultants considerably more than I did in 2019. All of them, however, can do simple math in their head and some can do pretty remarkable scientific IT wizardry.

  18. ” The current moronic administration has imposed guidelines and laws that “feel” good and made for the unskilled, lazy, uneducated, self centered liberals that are being produced in the mindless schools and colleges ”
    Really, @ David R Miller?
    Those very same educational institutions are predominantly found in the deep-red Republican bumf**k states like the one you live in!
    Nothing to do with the current federal administration.

  19. Speak for yourselves, but the pandemic made me rich. I never dreamed that my investment portfolio would do as well as it has in the last 5 years.

    I’m also earning 40% more at work than a few years ago, and my home has nearly doubled in value. Hate to say it, but somehow a global health crisis was the best thing imaginable for my family’s long-term financial success. Dare we wish for another pandemic, or some other n
    global emergency?

    I think the lesson we’ve all learned is that the government really does have our back and won’t allow us to suffer losses beyond a temporary setback.

  20. @benG
    Sorry you believe that but it’s not accurate. Since the pandemic the us actually had the first significant real wage growth in a long time. One of the contributing factor to sustained inflation. Economically speaking, I am much much better off today than before the pandemic. Yes, inflation is high but my portfolio earnings is up higher. I don’t really care if my head of lettuce is an extra 75 cents. And if you think I’m just one lucky person, well all of my IT colleagues make well over 6 figures, our bonuses have been up. I have friends turning down 180k software development jobs because they expect more and they get it. My circle of friends don’t talk about unemployment or fear of layoffs like they did in the financial bubble days or the dot com bust days. The market has already been recovering since 2022. Don’t believe me ask the magnificent 7 stocks like nvidia. I bought it sub $200 in 2022. Sold it at $770. I believe it’s at $900 now. There is a reason why we never entered a recession and that’s because unemployment rate remains low. Maybe where you live it’s not doing too well but vast majority of the productive parts of the us is better than fine.

  21. Even though you posted a convenient wage graph in the comments, your original article continues to state “tickets are cheaper in real terms” by comparing to inflation. Thats not how it works – tickets aren’t cheaper for me because my other expenses went up by more. They are only cheaper if I’m making more. You know this. Clickbait

  22. business class from east coast USA to Vietnam/Singapore are in the $6000-8000 r/t about double pre 2020. economy class are around $2000-2500 up a good $500-1000. $2000 used to be premium economy. we go about 2-3 times per year

  23. That post may be an entertaining explanation of what might have happened in 2023, but is not very helpful or relevant in 2024. Domestic basic economy fares may be down a few bucks. Same with Frontier and Spirit. But ask anybody who has tried to buy a premium economy or business class ticket on an international flight lately. Sticker shock is the norm in 2024, with cash prices and redemption rates anywhere from 30% to 50% higher than they were just a year ago.

    It’s an ugly truth that’s not being talked about much, except for a few of the comments on here. Sooner or later, the number of points required to fly in a manner depicted on Instagram or in credit card pumping blogs will be prohibitive. We’re almost there.

  24. Like Stuart, I would always pay cash for international business if the cost were only $3K or so RT. But since the pandemic, I have been flying international business TATL using points. I could never find flights for cash less than $5-6K or so, but could usually find saver awards in the 60k-80k range, and I am still sitting on a lot of points, so points it has been. I’ve booked four TATL RTs this year in business on a combination of JA, Iberia, AF, Swiss, VA and BA so far However, I was kind of surprised recently to see IAD-LHR RT tickets in business class for the fall at $2.9K cash. I snapped those up. I had heard that business travel between US and LHR was way down, which may explain it.

  25. Maybe first class is cheaper between major cities, but it certainly is not between smaller airports. One ways from Idaho to the east coast or to Hawaii used to be way under $1000 and now they are often way over $1500.

  26. Gary I’m not sure where you’re getting 19% from. The annual inflation rate for the United States was 3.2% for the 12 months ending in February, and 3.4% the year before. At it’s highest point during the pandemic it was 7%.

    That said I have seen coach prices for many of my frequent routes go way up since the pandemic. But I have noticed the cost of business class, both for domestic and short haul international flights, seem to be way down, likely due to the decrease in business travel in the era of zoom meetings.

  27. I concur with @BenG. ex-DFW to Europe prices in premium cabins have skyrocketed over the past few years. There aren’t any bargains to be had with premium economy now outpacing what business class used to be priced at pre-pandemic. These aren’t marginal increases. Its night and day, well outpacing inflation. And unless you catch the rare unicorn of a non-BA partner award, the award seats are several times more expensive in premium cabins with AA’s dynamic pricing.

  28. You’re assuming my wages are also up 19%. They’re not. Just because everything else is up 19% and airfare “only” up 9% didn’t mean I’m paying less. It’s called Greedflation. Prices are up, my wages are down, hence why I’ve flown less recently than ever before.

  29. I agree with others.

    I only fly First (domestic) and Business (international)

    Prices are way, way, way up.

    In the past you could get deals here and there from select US airports to Europe, South America, and even Asia for $3k.

    Now it’s rare to see a $5k fare.

    I fly out of MSP (fortress hub) but I commonly will find flights from Chicago, Boston, NY, Vancouver, Seattle, SF, LA and then just fly MSP to those airports and then onwards

    The last year there is nothing cheap in J out of any of those airports.

    One of the reasons is the downfall of the Chinese carriers which held Pacific flight prices down. Also the fall of the South American Airlines. Not sure why Europe exploded in price.

    Prices are WAY up from 1999 and also 2020 and 2022

  30. This is completely idiotic, as is any other article that references “inflation is blah%.”

    Inflation for an individual is the increase in prices of whatever you want to buy.

    Want to buy a home and home prices are going up 20% per year? Inflation is 20%.

    Want to fly a lot and airfare is going up 15%? Inflation is 15%.

    The inflation numbers cited by the government are based on a strategically designed basket of consumer goods that can be manipulated to say whatever they want it to say…

    The price of beef or eggs went up 15%? Ok, just redefine the “basket” that defines “inflation” by replacing beef with tofu and fresh eggs with powdered eggs. Problem solved.

    Business class might be a relative deal these days, but using inflation as an argument for anything is always misleading.

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