Airfare took another plunge last month, after a wild ride over the past year, reflecting volatile energy prices and swings in demand.
Fares fell 18.9 percent in the year to June, or 8.1 percent between May and June, even as passenger traffic has reached record highs. The numbers, however, are somewhat deceiving due to a combination of circumstances.
Ticket prices spiked last summer as Americans planned the holidays they were denied during the pandemic. At the same time, airlines struggled to make seats available, having planes grounded while no one was flying and laying off staff in a wave of retirements of pilots and other personnel. Then, jet fuel prices went up, and airlines passed the extra costs on to customers.
Those factors have noticeably decreased in recent months. Airlines have been hiring aggressively for all positions and adding flights, bringing capacity back to pre-pandemic levels. And as energy prices moderated, ticket prices also decreased.
Although this summer has seen its share of mayhem at airports, much of it has been due to weather; airlines also blamed a lack of air traffic controllers.
However, there are significant wrinkles to how airfares are measured, which makes analysis difficult.
It has been difficult to adjust for seasonal factors in airline travel, due to extreme disruption during the pandemic. Also, the Labor Department’s price index is overwhelmingly composed of domestic flights — international routes have seen the biggest price increases as even more travelers flock to foreign destinations.