There’s relief in sight for inflation-weary Americans.
Average airfare fell 8.1% in June from the month before; it also dropped a whopping 18.9% over the same month last year, according to data released by the Department of Labor in its monthly Consumer Price Index report on Wednesday.
The decrease in fares comes amid record-breaking travel demand, suggesting the possibility that the trend of so-called “revenge travel” following coronavirus pandemic reopenings is beginning to wane.
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Fares began climbing in 2021 before soaring last summer. This was partly a result of the pent-up demand from the pandemic and because Americans had more cash savings available than normal due to limits in certain types of spending during the pandemic. With staffing and equipment shortages, airlines struggled to add enough supply to meet the demand. A surge in fuel prices linked to the Russian invasion of Ukraine also contributed to higher prices.
As fares ease, the airline industry is in overall better shape, despite ongoing hurdles linked to persistent bad weather and a shortage of air traffic controllers.
As recently as late last year, airfare topped the CPI report as an inflation leader, with ticket prices climbing nearly 43% over the previous year.
However, last year’s price changes come with an asterisk. In 2022, there was a strong travel demand. In 2021, vaccines were still being rolled out, and many countries still imposed at least limited travel restrictions to try and slow the spread of the virus. So, drawing a comparison between the two years inherently doesn’t tell the full market context.
This year, though, the report is generally more representative of true conditions, as there are similar demand trends year over year.
The overall CPI climbed 3% for June, a major slowdown representing a significant slowing of inflation.
Even as airfare drops overall, many flights — particularly on international routes and during peak times — remain relatively pricey. Still, as was the case this spring, there are still plenty of deals to be found.