The CEO of United Airlines has warned that prices for flights during the busy holiday season will spike. United Airlines CEO Scott Kirby said surging fuel prices are to blame for the upcoming travel prices that are expected to balloon.
"Higher jet fuel prices lead to higher ticket prices," Kirby told CNBC. "Ultimately, we'll pass that through."
Kirby did not speculate on exactly how much airline fares would increase. However, United Airlines anticipates an average price of $2.39 a gallon in the fourth quarter. That's an increase from a $2.14 a gallon price in the third quarter, and a $2.02 average the airline paid in the fourth quarter of 2019.
But it isn't only jet fuel that is spiking. Americans are paying more at the pump.
Typically around this time of the year, gasoline prices trend downward — but the opposite is happening. Generally, after the summer travel season, gas prices decrease as fewer people are driving around on vacation, and more people settle back into work and school.
As of Sunday, the national average price of a gallon of regular gas was $3.385 — a 7-year high. Prices are sky-high compared to just a year ago, when gas only cost $2.163 per gallon, according to AAA.
The state that has felt the most pain at the pump is California. The average price for a gallon of regular gasoline in California is a whopping $4.544. However, if you need to fill up your tank in the coastal town of Gorda — in between Los Angeles and San Francisco — you'll pay a whopping $7.59 for a gallon of regular unleaded, and premium will cost you nearly $8.50 per gallon.
Patrick De Haan, head of petroleum analysis for fuel-savings app GasBuddy, said the rising gas prices is "kind of a two-fold issue."
"First of all, China is running perilously low on coal to fire up its power plants and, as a result, they're buying as much coal and natural gas and oil as they can," De Haan explained.
NACS, the leading global trade association dedicated to advancing convenience and fuel retailing, gave an explanation on the high gas prices.
"In short, as always, it's about oil prices, which are the dominant factor in the price of a gallon of gasoline," NACS stated. "On October 20, oil prices were around $85 per barrel. Exactly two months earlier, they were $65 per barrel. There are 42 gallons in a barrel of oil, so every dollar increase in a barrel equates to about 2.4 cents per gallon."
During the town hall event last week, CNN anchor Anderson Cooper asked Biden when the surging gas prices would start to come back to Earth.
"My guess is you'll start to see gas prices come down as we get by, and going into the winter, I mean excuse me, into next year in 2022," Biden responded. "I don't see anything in the meantime that is going to significantly reduce gas prices."
You should also prepare for your home heating bill to increase this winter.
The U.S. Energy Information Administration released its Winter Fuels Outlook report earlier this month, which estimated that some Americans could be paying as much as 54% more.