As US air travelers are discovering the price of air travel has risen a lot since last year.  US Airlines fares are up. Take a look at this chart.

The chart shows how, overall, fares have been declining over time. Then in 2022 came a swing up. The combination of declining fuel prices and more efficient aircraft enabled this decline.  In 2019, the best year on record for the industry, you will notice the fare decline had slowed.  Airlines had to discount fares to get people to fly during the pandemic.

But 2022 saw an opportunity for airlines to claw back revenue. 

  • The chart also identifies the ULCCs as operating at significantly lower pricing than the overall industry. 
  • Note the sharp decline in fares at Hawaiian – enabled by a much more efficient fleet. 
  • Notice how Delta has been able to operate at the highest pricing for some time. It is the 2022 leader in terms of average fare/mile.  This was confirmed on yesterday’s earnings call.  Delta has managed to accomplish something special here.
  • Breeze, the newcomer, has lowered its average fare/mile in order to win over traffic.

Another perspective of the market comes from the following chart. The market is clearly tiered and the dropoff to lower tiers is rapid.  This chart shows the YTD 2022 traffic numbers through March.

Here’s the full year 2021 chart and we can see there are subtle changes. But the tiers are largely consistent. 

For some extra perspective, the next chart lists how the pricing has changed since 2019. The difference between these two charts is interesting.  Average fares show a different pattern than average fare/mile. 

The key seems to be stage length. As we see in the next chart, most stage lengths varied within a narrow band. As expected, Hawaiian flies the longest stages. 

Finally, here’s a table summarizing the data.

The data suggests that the 2022 fares reflect the rise in travel demand. But when looking at the fares, these higher rates are likely to match inflation.  Airlines may be bullish in forward-looking statements.  But it is not yet clear what costs are likely to do as we move through the year. Labor costs can be expected to spike even if fuel costs start to ease.  As airlines have discovered, skilled people are not fungible.  Layoffs are much easier than hiring.  Bookings were no surprise to airlines, and they didn’t hire up fast enough.

Please follow and like us:
Pin Share

Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

%d bloggers like this: