Airfare is cooling as carriers add service for summer

Flights are getting cheaper as airlines boost service during what is shaping up to be a busy summer.

US inflation data this week showed airline ticket prices fell 8.1% in June compared to the previous month, the largest decline in about a year and the second-largest since April 2020, when the Covid pandemic suddenly depleted demand for air travel.

Airlines enjoy cheaper fuel and a perpetual travel boom. Daily airport screenings by the Transportation Security Administration have exceeded 2019 levels, before the pandemic.

Delta Airlines On Thursday, it reported record second-quarter earnings, forecast more record revenue through the beginning of fall and raised its forecast for the full year.

Delta’s revenue per available seat mile, which measures how much airlines generate for each seat mile they fly, rose 1% in the fourth quarter from last year as capacity increased 17%. It’s a sign that prices and revenue remain flat despite the added service.

International fares appear to be working better as customers opt for flights abroad, a shift from previous years when travelers preferred domestic destinations during pandemic travel restrictions.

Delta’s domestic revenue unit revenue was down 1% in the quarter compared to the same period in 2019, but transatlantic unit revenue was up 22%, the smaller segment across the Pacific was up 29%, and service unit revenue in Latin America was up 16%.

Airlines have been particularly bold in adding record amounts of service to Europe this summer, and rising unit revenues have shown that fares there are still holding up.

United Airlines And American Airlines They will provide their forecasts on demand next week when they are due to report on the results.