Airfare is cooling as carriers add service for summer peak period

Flights are getting cheaper as airlines boost service during what’s shaping up to be a busy summer. U.S. inflation data this week showed airfares dropped 8.1% in June from a month earlier, the biggest decline in nearly a year and the second biggest since April 2020, when the Covid pandemic suddenly sapped demand for air travel. Airlines are enjoying cheaper fuel and a lasting boom in travel. Daily airport screenings by the Transportation Security Administration have recently surpassed 2019 levels, before the pandemic. Delta Air Lines on Thursday reported its highest-ever quarterly earnings, estimated more record revenue through the start of fall and hiked its full-year forecast. Delta’s revenue per available seat mile, which measures how much airlines are generating for every seat they fly one mile, rose 1% in the last quarter from a year ago with capacity up 17%. It’s a sign that fares and revenue are holding up despite added service. International fares appear to be doing better as customers opt for trips abroad, a shift from previous years when travelers favored domestic destinations during pandemic travel restrictions. Delta’s domestic revenue unit revenues fell 1% in the quarter from the same period of 2019, but trans-Atlantic unit revenues rose 22% and the smaller trans-Pacific segment climbed 29% and Latin American service unit revenues were up 16%. Airlines have been especially aggressive in adding record amounts of service to Europe this summer and higher unit revenues are showing that fares there continue to hold up.<br/>