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KEY TAKEAWAYS
- Airfare prices have decreased by 5.1% compared to last year, according to the most recent Consumer Price Index reading.
- Airlines are struggling as they face over-supply and increasing operating expenses.
- To combat this, many airlines are offering discounted prices to lure customers in.
Your flights will likely be cheaper for the rest of the summer as airlines offer discounted tickets in an attempt to fill seats.
While demand has hit record highs in recent weeks, airlines that have already reported results for the most recent fiscal quarter said carriers overshot the number of flights and seats available this summer. Because of that oversupply, airlines are discounting tickets to try to fill seats.
Air travel broke records last summer, as people continued to catch up on travel they missed during the shutdowns of the pandemic. Airlines expected more of the same this year, and planned their capacity accordingly.
“Looking forward, we see multiple airlines have begun to cancel loss-making capacity,” United Airlines (UAL) CEO Scott Kirby said in a press release. “United has long been preparing for the moment when industry-wide domestic capacity would adjust—it’s now clear that inflection point is just 30 days away.”
So What Does This Mean For You?
You could fly for cheap during the remainder of the summer as companies try to match their supply with demand.
Prices have already fallen so far this summer. Airfare prices fell from their May levels last month, down 5.7%, according to the most recent release of the Consumer Price Index. Year-over-year, prices were down 5.1%.
Consumers will get a look at how widespread of a phenomenon this may be this week when American Airlines (AAL) and Southwest (LUV) release their second-quarter earnings reports.