The cost of a plane ticket plunged in the early days of the summer travel season, continuing a retreat as airlines benefit from lower jet fuel prices.
US airfares in June fell 8.1% from the prior month, the third consecutive decline and the largest drop since last July, according to figures released on Wednesday by the US Bureau of Labor Statistics. The slide was the second-biggest on a monthly basis since April 2020, when airlines saw travel demand evaporate during the onset of the pandemic.
Compared to last year, June airfares plummeted 18.9%.
Read More: Why Flights Might Get Cheaper After a Busy Summer
The declines come amid falling fuel prices, giving carriers a boost as they prepare for a surge of summer travel expected to rival the record traffic of 2019. Jet fuel prices have tumbled 57% this year, based on the rate for immediate purchase in New York harbor. Fuel vies with labor as the two largest expenses for airlines, and fares historically have followed the move in fuel prices.
About 275 million people are expected to travel between May 25 and Sept. 4, according to TD Cowen. That’s 7.4% higher than in 2019 and 19% higher than last year.
US passenger counts, which had lagged the record 2019 levels since the start of the pandemic in early 2020, have roughly recovered to pre-pandemic levels in recent months, according to Transportation Safety Administration data.
Surging US travel took hold as the pandemic waned in 2021 and hasn’t let up. The industry thus far has seemed impervious to inflation and economic slowing as consumers continue to use pandemic savings for travel.
Domestic and near-international trips fueled the industry’s early pandemic recovery. More recently, soaring demand for international travel, particularly to Europe, has bolstered the industry as countries have dropped lingering Covid-related restrictions.
Delta Air Lines Inc. is set to be the first major US carrier to report second-quarter results Thursday and provide an update on demand through the peak summer season. The carrier last month said 55% of its seats offered in the current quarter have already been booked, including 70% for long-haul global flights and 40% on domestic routes.
A group of 11 US carriers are expected to report a record $58 billion in second-quarter revenue, according to Deutsche Bank.
(Adds US passenger, demand data from sixth paragraph)
