Airfares at American Airlines, Delta Air Lines and United Airlines shot up nearly 50% for the week ending May 23 compared to a year ago, according to an analysis by financial services firm Cowen.
from Mastercard Economics Institute shows consumers are booking domestic and international travel at a rate not seen since before the pandemic. By the end of April, flight bookings were up 25% compared to pre-pandemic levels, with the report's authors noting an"unprecedented surge" in international trips, based on anonymized spending data fromAnother challenge for airlines: managing rising labor costs.
But rising airfares are"all based on the supply of airline seats and demand," said Robert Mann, owner of airline industry consulting firm R.W. Mann & Company."There is some cost pressure, but that usually comes out of the airlines' margins," It's also not unusual for ticket prices to soar roughly 30% in the summer months, compared to the rest of the year, according to Mann.
Airlines continue to recover from the impact of the pandemic, when travel all but vanished, as well as work through operational kinks including pre-departure COVID-19 testing requirements for passengers heading to other countries. "Some of the biggest long-haul international planes are still not fully deployed and others aren't yet available," Mann said."So capacity is strained and there is a surplus in demand, and that's why we have rising prices. It is simply the market responding to an excess of demand over supply."
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