May Airfares Rose 18 Percent While Bookings Stayed Flat

The average price of a plane ticket booked through a travel agency in May rose 18 percent compared with the same month a year earlier, according to data from Airlines Reporting Corporation. The number of trips booked that month stayed flat year over year. Jet fuel prices had risen after the start of the Middle East conflict in February.

Jet fuel ranks as the second-largest expense for airlines after labor. CBS News reported that carriers raised fares to offset those higher costs. Airlines have shown little incentive to lower fares even as fuel prices ease, analysts said.

Strong travel demand and reduced industry capacity after Spirit Airlines filed for bankruptcy and shut down in May have kept prices elevated. Spirit operated as an ultra-low-cost carrier that provided fare competition on the routes it served. CBS News reported that prices tied to oil tend to rise quickly but decline more slowly, a pattern known as the rockets and feathers effect.

Julian Kheel, founder of travel rewards site Points Path, said airlines react promptly to cost increases to protect margins but move more slowly when costs fall. Steve Solomon, chief commercial officer at Airlines Reporting Corporation, said oil prices form part of the story behind higher fares, along with continued geopolitical uncertainty and robust demand.

Kheel noted that remaining carriers need time to add capacity and that travelers have shifted toward premium seating since the pandemic.