Airlines Reporting Corporation's (ARC) data for June shows that average ticket prices have risen 33% in the US market compared to just one year ago. While prices are down slightly from May, passengers continue to book more trips, especially internationally. Let's take a look at the numbers.
Revenue skyrockets
ARC-affiliated travel agents, representing over 10,640 agents across the US, saw revenues of $7.9 billion in June 2022. This is an increase of 78% from the year before, supported by a 52% rise in total international trips this year. However, revenue is down 6% from May and trips down 5% (4% domestic and 7% international).
For passengers, ticket prices continue surging. An average round-trip flight would set travelers back $605 in June 2022, up 33% from the previous year. This is chalked up primarily to strong demand from passengers, many of whom have not been traveling for the summer for over two years, but also due to rising input costs such as fuel and employee costs.
ARC booked 21.6 million passenger trips last month, up 23% from 2021, signaling that demand has not been impacted for the summer months despite economic headwinds. This has been reflected in airline earning's this quarter, with the big three all reporting profits on the back of record revenue.
In a statement, Steve Solomon, Vice President of Global Customers and Data Products at ARC, said,
"In pre-pandemic years, we typically saw an 8-12% decline in total sales and passenger trips from May to June. The smaller month-over-month decline in total sales and passenger trips shows air travel demand remains strong for both domestic and international itineraries.”
Will it last?
As the summer ends in less than two months, airlines and ticketing agents will be looking anxiously to the future. In the US, high inflation is set to hit discretionary income for travel, leaving the autumn and winter numbers unknown. A possible recession could be another huge issue for airlines, which have yet to even make a full capacity recovery.
However, there is some good news as well. The US market has been less hurt by the staffing shortages that are plaguing Europe, allowing carriers to offer their full schedules again. While individual airlines, like American with its long-haul operations, may be behind, the market as a whole is making a recovery. And if revenue numbers are anything to go by, a recovery might already be here.
Airlines optimistic, for one more quarter
Looking at airline earnings, it is clear that carriers are happy with their profits for now. Most have issued guidance that includes a predicted profit for Q3 as well, showing that steady financial footing for the first time ever. However, anything after that remains a challenger, with carriers citing high fuel prices as a particular challenge. For now, the US market is flying high, and the summer is in full swing.
What do you think about the US' airline recovery? Will it last through the year? Let us know in the comments!