Kayak puts the average US domestic fare $100 above last August

A trip request lands in September for a customer visit in November. The budget line it draws against was sized last autumn, when the average domestic seat on Kayak's dashboard cost $290. On Aug. 31 it cost $390 ^[3]. Ten trips budgeted at $2,900 now cost $3,900, so the line is short $1,000 before anyone books a hotel ^[6].

Jet fuel averaged $2.42 a gallon shortly before the war with Iran began on Feb. 28 and $4.43 on Sept. 11, both per the Argus Jet Fuel Index ^[1][2]. That is an 83% increase ^[1]. Gizmodo, which reported the fuel and fare figures, does not break the extra $100 a seat into fuel and everything else. Diesel is another cost for anyone moving freight: a record high on Labor Day, and an average of $6.23 as of Monday ^[11].

Gizmodo's advice is to book holiday flights now ^[9]. The fare data it cites runs both ways. International fares averaged $896 on Aug. 31 against $705 a year earlier, and $1,106 at a peak in May ^[4], which is up 27% over the year and down 19% over four months ^[5][4]. Fuel on Sept. 11 sat 9.2% below its April high of $4.88 ^[3]. So booking now is a bet on the war, and the fare outlook turns on flows through one pipeline: Saudi Arabia's East-West line was carrying roughly 4 million barrels a day, about 4% of world oil production, before drones hit it on Sept. 10, according to the Wall Street Journal ^[10].

Andrew Levy, founder and chief executive of Avelo Airlines, told Fox Business on Sunday that fuel prices were "uncomfortably high" and that his airline would need to raise ticket prices if fuel stays where it is ^[6]. "At the end of the day, we have to be able to pass these costs onto our customers," Levy said ^[7].

The people doing the travelling are getting raises smaller than the fare increase. Consumer prices rose 3.4% in August from a year earlier while average wages rose 3.1%, according to CNBC ^[8]. The average domestic fare rose 34.5% over roughly the same period ^[2], about eleven times the wage increase ^[7]. A per-trip cap lifted by 3% for next year lands short of $390.

For the rest of Q4, two questions separate the unbooked trips: whether someone else fixed the date, and whether airfare is the largest line in the trip. Fixed date and fare-dominant, such as a booth at a conference, is the case for buying now and accepting that you overpay if fuel falls back toward $2.42. Fixed date with fare as a minor line, such as a week-long install where lodging and labour dominate, can be booked on convenience. Movable date and fare-dominant is the case for waiting, since international fares have already come off $210 from May ^[4]. The budget itself has to move this month: at $390 a domestic seat it is 34.5% low ^[2].