There is immediate relief for inflation-weary Americans.
Average airfares fell by 8.1% in June compared to the previous month; it also fell a whopping 18.9% from the same month last year, according to data released by the Labor Department in its monthly Consumer Price Index report on Wednesday.
The drop in fares comes amid a record increase in travel demand, suggesting that the so-called “revenge travel” trend after the reopening of the coronavirus pandemic is starting to wane.
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Fares began to rise in 2021 before skyrocketing last summer. This is partly due to pent-up demand due to the pandemic and because Americans have more cash savings than usual due to restrictions on certain types of spending during the pandemic. With staff and equipment shortages, airlines are struggling to add enough supplies to meet demand. Soaring fuel prices related to Russia’s invasion of Ukraine also contributed to higher prices.
As fares fall, the airline industry is doing better overall, despite ongoing roadblocks related to prolonged bad weather and shortages of air traffic controllers.
EQUAL as recently as the end of last yearAirfares topped the CPI report as an inflation driver, with fares up nearly 43% year-over-year.
Related: 6 key tools and tips to find the cheapest airline tickets
However, last year’s price change comes with an asterisk. In 2022, travel demand will increase sharply. In 2021, a vaccine is still being rolled out, and many countries still impose at least limited travel restrictions to try to slow the spread of the virus. Thus, comparisons between two years are not inherently indicative of the entire market landscape.
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This year, however, the report is generally more representative of actual conditions, as there are similar demand trends over the years.
Overall CPI rose 3% in June, a large decline that represents a significant slowdown in inflation.
Even with overall airfares falling, many flights — especially on international routes and during peak times — are still relatively expensive. However, as was the case this spring, there are still plenty of deals to be found.
Related: When to book flights to get the cheapest fares?
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