Airfare is cooling as carriers add service for summer

Airfares are getting cheaper as airlines ramp up services for the upcoming busy summer season.

U.S. inflation data this week showed airfares fell 8.1% month-on-month in June, the steepest drop in nearly a year and the second-biggest since April 2020, when the coronavirus pandemic suddenly sapped demand for air travel.

Airlines are enjoying cheaper fuel and an enduring travel boom. The TSA’s daily airport screenings recently surpassed pre-pandemic levels in 2019.

Delta Airlines It reported its highest-ever quarterly earnings on Thursday, forecast record revenue by early fall and raised its full-year forecast.

Delta’s revenue per available seat mile — a measure of how much revenue an airline generates per seat per mile flown — rose 1% in the last quarter from a year earlier, on a 17% increase in capacity. This shows that despite the increase in services, fares and revenues have remained the same.

International fares appear to be doing better as customers choose to travel abroad, a change from previous years when travelers favored domestic destinations amid pandemic travel restrictions.

Delta’s domestic service segment revenue fell 1% in the quarter from the same period in 2019, but revenue in the transatlantic segment rose 22%, the smaller transpacific segment rose 29%, and revenue in the Latin American service segment rose 16%.

Airlines have been particularly aggressive this summer, adding a record number of flights to Europe, where rising unit revenue suggests fares continue to hold firm.

united airlines and American airlines Their outlook will be provided on demand when results are scheduled to be reported next week.