ULCC - Air fares are soaring - what does it mean for airline stocks?
Air fares in the U.S. soared 37.8% in May against a soft comparable to a year ago when travel was just starting to pick up again following the vaccination push in the U.S. On a month-to-month comparison, air fares were up 12.6% in May after rising 18.6% in April and 10.7% in March, according to data compiled by the Bureau of Transportation Statistics. Analysts do not anticipate fares to fall significantly due to higher fuel costs and staffing shortages. There is also a supply and demand imbalance in play with 12% fewer flights operating in the U.S. compared to the summer of 2019, but a surge in bookings for business travel and family vacations. "The demand is off the charts," stated Delta CEO Ed Bastian said at an industry conference last week. "It's coming with leisure, it’s coming with premium customers, it’s coming with business, it’s coming with international. It
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Air fares are soaring - what does it mean for airline stocks?