US: Why airfares will likely keep getting more expensive

Probably nothing speaks more to the post-pandemic economic recovery in the United States than the dramatic rise in demand for leisure air travel over the past several months. Since the number of passengers began steadily increasing in March, US airlines have found themselves besieged by Americans eager to escape Covid-19 confinement and travel to beaches, mountains and theme parks or visit family and friends. Now, some flights to popular vacation spots are selling out, something airlines haven't experienced to this extent since the pandemic began, according to our own analysis. Travelers should expect airfares to continue to rise to pre-pandemic levels in the coming weeks, and likely move even higher in the months ahead. Story looks at why, including steadily increasing demand. Even in the absence of US business travelers, who normally account for a fifth of passenger trips and 30% of spending, according to US Travel Association data, some carriers find their passenger load factors — the percentage of capacity filled per flight — creeping toward or even surpassing 80%. That's not far from the US domestic load factor of 85% achieved in 2019, which was the busiest US air travel year in history, according to the US Bureau of Transportation Statistics. That this is happening at a time when both business and international travel are still down around 70% from 2019 levels, according to our calculations, makes the rebound even more impressive. With vaccination rates rising, Covid-19 restrictions lifting and entertainment venues like Broadway soon reopening, we expect to see domestic demand rise even further through the end of the year. There is particular concern about travel volumes at Thanksgiving and Christmas and the ability of airlines to keep up with demand.<br/>