Airfares rose nearly 43 percent year-on-year, according to data released by the Labor Department on Thursday, a record increase that topped the department’s monthly Consumer Price Index (CPI) report.
The CPI, which measures inflation, shows that overall prices across all categories have increased by 8.2% over the past year and 0.4% in the past month. Last month’s report showed a 33% increase in airfares.
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Airfares are the fastest growing category, followed by utility bills (33.1%) and eggs (30.5%). Petrol ranked fourth, up 18.2%.
The soaring airfares come as demand remains strong in the fall amid the busy summer and holiday season, an unusual trend. Demand for leisure travel is still strong after nearly two years of border closures, while business travel is slowly starting to return as more workers return to the office.
During a call with investors on Thursday, Delta Air Lines president Glenn Hauenstein noted that demand for travel, especially to Europe, has been unusually strong.
“Demand for transatlantic travel is surging in the fall,” says Hauenstein. “Starting in October, we anticipate flying more transatlantic capabilities than in 2019.”
Hauenstein says that strong demand is expected to continue over the holidays.
Further complicating the increase in airfares is the airline’s response to various operational disruptions this spring and summer, as airlines reduce their capacity to build networks significantly. than.
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While this has the positive effect of giving airlines more flexibility in responding to delays and cancellations caused by causes like thunderstorms, it also means airlines is effectively pulling supply from the system. With demand still high and supply decreasing, capital prices have risen.
Airfares are expected to remain high through at least the holidays. Prices for Christmas flights are up 55% year-over-year and 19% year-over-year, according to data tracked by the flight booking service. Hopperwhile Thanksgiving prices are up 25% from last year.
However, there are signs that inflation is starting to affect Americans’ holiday plans. A recent survey of Bank rate found that of 43% of American adults planning to travel on vacation, 79% are changing aspects of their travel plans due to inflation (Bankrate is owned by Red Ventures, which also own TPG.)
If you haven’t booked your holiday travel yet, consider making your plans sooner: holiday flight prices typically increase as October turns into November, meaning prices are likely to go up.
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