Airline bookings dip in the U.S as sky-high airfares continue to soar

As reported by Karryon

Airline fares in the U.S have jumped a whopping 47% since January and remain higher than they were before the pandemic, which are likely leading to a slowdown in the number of seats airlines can sell.

The post-pandemic surge in airline supply and demand continues to be a global issue with fares sky rocketing and no end in sight.

Bookings for flights within the United States fell 2.3% in May compared with April, research firm Adobe Digital Insights said Tuesday.

The value of those sales rose 6%, however, to $8.3 billion, because of price increases.

Prices for U.S. flights in May were 30% higher than the same month in 2019 – the fourth straight month in which fares topped pre-pandemic levels.

May prices were up 6% over April, according to Adobe, which based numbers on transactions at six of the largest 10 U.S. airlines.

“While some consumers have been able to stomach the higher fares, especially for those who delayed travel plans during the pandemic, the dip in bookings shows that some are rethinking their appetite for getting on a plane,” said Vivek Pandya, lead analyst for Adobe.

Airfares are among many factors contributing to the highest inflation rate that Americans have seen in 40 years.

Airline officials say demand for travel is strong after two years of the pandemic. As for the prices, they say they need to raise fares to cover surging jet fuel prices.

The number of air travellers in the U.S. has rebounded to nearly 90% of 2019 levels, according to government figures. International travel has lagged domestic travel, but it could get a boost from the Biden administration’s decision to end the requirement to show a negative test for COVID-19 before flying to the U.S.

United Airlines said Monday that searches for international trips increased 7% in the three days after the U.S administration announced it would drop the testing requirement.

Meanwhile, Australia’s competition regulator has warned that domestic airfares will also rise dramatically in the coming months, as higher jet fuel prices finally bring an end to pandemic discounts.

The Australian Competition and Consumer Commission (ACCC) issued the warning in its latest regular report on airline competition in Australia.

“While travellers have benefitted from generally low airfares over the past year as airlines encouraged people back to the sky, historically high prices for jet fuel means we are starting to see fares rise again,” ACCC commissioner Anna Brakey said.

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