By Chris Isidore, CNN
(CNN) — Jet fuel prices nearly doubled. Airlines cut flights. Travelers were still buying tickets.
That was already a pretty good recipe for higher airfares.
And then, Spirit Airlines went out of business.
Passengers were already paying more to fly – even before the industry lost the budget airline famous for pushing fares lower.
This was shaping up to be a very expensive summer to fly. Spirit’s demise will probably accelerate that trend.
A perfect storm
US airfares were already up sharply the week before the discount airline shut down, travel booking site Kayak and investment firm Raymond James reported.
The conditions were perfect for airlines to raise fares – bad news for bargain-seeking travelers.
Here’s why:
Jet fuel: Jet fuel prices are up 84% from January, according to Airlines for America, the US industry’s trade group, adding to costs. The International Energy Administration warned that jet fuel shortages could become a reality in a couple of weeks in Europe, which gets most of its jet fuel from the Middle East. Asia could face the same problem, because it uses Middle Eastern oil to create jet fuel at its refineries.
American refiners ship jet fuel overseas, pushing US prices higher, too.
Cut flights: That led many airlines to cut their schedules. They eliminated flights that were only narrowly profitable when fuel was cheaper – flights that are now unprofitable to fly.
Those flights, on less attractive travel days midweek or Saturday, or a less popular time of day to travel, often had the cheapest seats available for travelers.
Aviation analytics firm Cirium forecasts that in just the last week, global airlines have cut planned seat offerings by 3.6% during the June 1 to September 30 period.
“When flights get canceled, we do see prices can spike quickly due to a surge in demand, especially on the affected routes,” said Kayla DeLoache, spokesperson for Kayak.
Strong demand: Airlines have reported strong bookings for the upcoming summer travel season. Several reported record revenues.
Higher fares: Kayak’s data shows the average domestic fare now stands at $365, up $30, or 9%, from the reading on March 23, just before the war in Iran sent jet fuel prices climbing. Fares are up $70, or 24% from this time last year.
Fares are also jumping higher week to week. Raymond James reports that as of April 27, the average fare for flights within the next week costs 9% more than the week before. For flights at least four weeks in the future, typically used by leisure travelers, are 7% more expensive.
Spirit goes bust
The closure of Spirit early Saturday morning could move fares even higher.
Spirit, with its no frills base fares, often provided the lowest fares in the markets it served, and forced other major airlines to offer a certain number of similarly bare-bones seats to compete.
Spirit’s flights would have provided about 2% of the seats available for travel this summer, but in some markets, including Fort Lauderdale in Florida, Detroit and Las Vegas, it offered a much greater share of available seats.
As its passengers seek other flights, there will be fewer overall seats available, creating a