Skift Travel News Blog

Infare, a Denmark-based provider of airfare data and analysis software, has been acquired. 

OAG, a UK-based provider of flight status and schedule information, said Friday that it has acquired Infare from private equity firm Ventiga Capital. The firm had owned Infare since 2017. 

The price and terms of the latest deal were not disclosed. 

OAG and Infare had been in a partnership that was announced in April 2022. 

OAG said the deal values the combined company at over $500 million. The combined company has 300 employees in 10 offices. 

OAG said that both management teams will continue with the company and retain a shareholding, with fresh backing from Vitruvian Partners. Vitruvian Partners bought OAG from Axio Group for $215 million in 2017. 

“The increasing dynamism in global travel and technology is fueling a need for more sophisticated, granular data to understand, manage, and unlock growth in air travel,” said Phil Callow, CEO of OAG, in a statement. “The acquisition of Infare strengthens our ability to deliver consistent and accurate information across the wider supply and demand value chain.”

Nerds, take comfort. Experts say that the “time value” of flying is still higher than it is for driving — suggesting that airfares aren’t too outrageously high.

Many Americans are complaining about the price of airfares today. But if one looks at U.S. government data on the consumer prices paid by urban consumers for U.S. flights, airfares are only slightly higher than the average between 2010 and 2014 on a seasonally adjusted basis. (See the chart of data collected by the St. Louis Federal Reserve, here.)

What’s more, economists like to compare the cost of a product or service with its alternative substitute as a way of measuring price fairness.

In the case of flying, driving by car is the most common second-best option. Jennifer Saba at Reuters Breakingviews ran some numbers for a sample trip to see how pricing compared:

In other words, if one measures the value of one’s time as it relates to the cost of a trip, flying still retains its value. Unless your flight is endlessly delayed. By Saba’s math: “If a flight is delayed for five hours, for example, air travel is only about 3 times more valuable than driving.” (.You’ll find Saba’s article on Reuters, here.)

So whether you’re flying or taking a road trip this year, don’t think only about “airmaggedon.” Also take comfort in the time you’re still saving by getting to your destination via the air, even if there are some delays. And take comfort from Skift’s analysis of why flying is so chaotic this summer.

The steady runup in ticket prices for flights in the U.S. this year appears to have come to an end. New data from Hopper found that average domestic fares have fallen by $20 to $390 since mid-May.

“Demand for domestic travel, which has been surging since late January also slowed in May, plateauing in line with airfare prices,” Hopper wrote Wednesday. However, the travel booking site noted that this is common as new bookings in mid-June begin to shift to fall trips that are after the summer travel peak ebbs in August.

In addition, despite the $20 drop — the first since the beginning of the year — U.S. domestic airfares remain roughly 18 percent higher than at the same time in 2019. International airfares are up 22 percent year-over-three-years.

Staffing, fleet, and other issues limit how much more U.S. airlines can fly. Most carriers, including the Big 4 — American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines — have either cut flights to mitigate disruptions, or loaded schedules with fewer flights than they had planned at the beginning of the year. The situation is expected to ease in the fall and winter when there is less travel demand, and training backlogs shrink.

We’ve said it once and we’ll say it again: air travel is pricey this summer, and getting pricier.

Cowen & Co. analyst Helane Becker estimated in a report Friday that U.S. airfares are up roughly 34 percent compared to to last year. That’s a big jump and likely to climb higher as airlines continue to par back schedules. Delta Air Lines said Thursday that it would “thin” schedules over Memorial Day weekend and into August, including cutting roughly 100 daily flights from July 1 to August 7. Alaska Airlines, American Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines, and United Airlines have already reactively cut schedules or updated guidance with fewer flights than they hoped to fly this summer.

“Demand is above 2019 levels, but capacity is still below 2019 levels,” Becker wrote. “We estimate it is ~90 percent of levels seen three years ago, and airlines continue to reduce capacity for this summer.”

She cited five reasons, including pilot staffing, aircraft, and air traffic control, for why airlines are reducing their schedules:

True to form, at midday on the Friday before Memorial Day — the unofficial start of summer in the U.S. — the Federal Aviation Administration limited the number of flights into, out of, and through Florida airspace due to “weather and staffing” at its Jacksonville air traffic control center.

Becker estimated that roughly 13 million people will fly in the U.S. this Memorial Day weekend. That would represent 90.5 percent of the number who flew over the same weekend in 2019.

From the Financial Times this morning:

Airfares rose by 18.6 per cent in April from the previous month, the largest one-month increase in the history of the Consumer Price Index, according to the US Bureau of Labor Statistics. 

On a yearly basis, the airline fares index was up 33.3 per cent, the largest one-year increase since 1980, though prices were still depressed at the same point in 2021 owing to the Covid-19 pandemic.

From the FT.

At issue is a supply-demand mismatch.

The average price across all US airlines for a domestic ticket booked one week before travel was $208 on May 9, up from $188 on May 2, according to US bank Raymond James.

Meanwhile, US carriers are flying 7 per cent fewer seats in the second quarter than during the same period in 2019, according to Raymond James analyst Savanthi Syth.