Air fares in the U.S. soared 34.1% in June compared to a year ago on an unadjusted basis against a soft comparable when travel was just starting to ramp up again following the vaccination push in the U.S.
On a month-to-month comparison, air fares actually fell 1.8% in June after rising 12.6% in May and 18.6% in April, according to data compiled by the Bureau of Transportation Statistics.
Analysts expect fares to stay elevated due to higher fuel costs and ongoing staffing pressure. Some airline have also tightened up capacity, which will support pricing.
United Airlines ( NASDAQ: UAL ) CEO Scott Kirby defended the level of fares at a recent conference appearance .
"When you look at the data, our aviation revenue as a percent of GDP still has 15% to 20% to go and to get to back to the pre-pandemic trends. If you look at fares, while they're up a lot from pre-pandemic lows, in real terms, our fares in the second quarter are going to be back to about where they were in 2014. So we're back to kind of a normal pricing environment. We're just returning to normal."
Watch Spirit Airlines ( SAVE ), Southwest Airlines ( LUV ), United Airlines ( UAL ), Alaska Air Group ( ALK ), Hawaiian Holdings ( HA ), American Airlines, JetBlue ( JBLU ), Allegiant Travel ( ALGT ), Mesa Airlines ( MESA ), SkyWest ( SKYW ), Sun Country Airlines ( SNCY ), and Frontier Group ( ULCC ) following the start of the airline earnings reporting season with Delta Air Lines spilling numbers earlier on Wednesday.
Read more about the June inflation report.
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Air fares fall slightly in June but remain very elevated