Airfares rose 25.5% over the past year. Airlines bragged about high fares on their earnings calls, and pledged to work to keep them elevated even if fuel prices fall. But what almost no one talks about is that fares are mostly above historic levels only because of pandemic-era inflation. In real terms, fares are actually 20% lower than they were a decade ago even after the recent run up, and that includes fees.
Consumer Price Index data shows airfares increasing 2.2% in July after rising 0.2% in June. Core inflation, excluding food and energy, has moderated (2.5% over prior year, though recently elevated). Even as airfares rose, as airlines cut bak on planned capacity growth amidst increased oil prices, hotel rates have been falling.
Cheaper Hotels Help Balance Expensive Tickets
The price index for lodging fell 2.8% in July after declining 2.3% in June. Since December,
- seasonally adjusted airfares are up 19.9%
- lodging prices are down 1.2%
That’s not, therefore, a ‘travel boom’. One reason airfares have been able to rise without depressing demand is that the total cost of a trip isn’t rising at the same rate, given that offset.
Airfares Are Still 20% Cheaper Than In 2016
The current airfare increase looks even more interesting in context. Seasonally adjusted airfares are down significantly relative to overall consumer prices over the past decade.
Nominal airline fares increased about 11.5% between the 2016 average and July 2026. Overall consumer prices rose 38.7%. Airfares failed to keep pace with the cost of everything else. This underscores while airfares have seen a recent run up, that’s off of incredible lows. Fares are meaningfully higher than a year ago. They are much cheaper than 10 years ago.
Air fares are still 20% lower inflation adjusted than in 2016. That tells you that you are still getting a good deal. Compare the cost of flying cross country compared to the cost of driving cross country. Then factor in 6-7 hours or even more with delays versus 2-3 days sitting in a car driving.
But people expect everything for nothing. They’ve been trained that everything should be free or near free. Because food magically appears on a store shelf.
Not really. Hotel rooms are in surplus (and are local). Airline seats are not (and are network competitive). The supply-demand difference between the two sectors is noticeably different.
I donno, Gary. I think you, and folks like @George Nathan Romey, are too quick to ‘sane-wash’ these higher airfares. Which, no, for nearly all intents and purposes aren’t a ‘good deal’ for consumers, no matter how selectively you slice a decade of inflation data.
@George Nathan Romey — Yikes, man. Too quick to blame your fellow passengers. Commercial flights are not equivalent to driving cross-country (ya, just drive to Hawaii, huh). Don’t wave away a sharp 25.5% surge by pretending passengers just ‘expect everything for free.’ Fares are up, reliability is down, but, naw, naw, it’s those other passengers that are spoiled (ignore the corporate greed, persistent inflation, or other macro-economic distress, like the wars, oil, etc.)
Spoken like a guy whose income and business (assuming you are reimbursed or write off the travel expenses) can afford the higher airfares. These higher airfares may look like a bargain to you, but us peons have to think twice before making travel plans.
@StarlessbBB — Three-cheers for those filthy peasants in the back! ‘Hip hip…’ (/s obviously)
Gary,
Perhaps a war economy and political chaos is benefiting you financially, but most normies are struggling. Some humility and reflection might benefit you.
Lies, damn lies and excessive stastics, Gary.
I dont know what you are talking about. Last september i brought 2 biz class tickets DEL to SFO for usd 4800. Last week exactly the same flights are Usd 8000. Seriously Gary????
@Steve – I am not in any way benefiting.
And I’m not suggesting there isn’t struggle out there.
But facts matter, and context matters. “Truthiness” isn’t enough.
And in 2024 i got 2 biz class tickets BKK to SFO for usd 4200 .on qatar. Today the same airline is giving 2 tickets DEL to SFO (a shorter distance , never mind telescopic fares) for usd 10,000. Explain this “decrease” Gary!!
Interesting how the 2022 fare surge didn’t last and guessing this one will have give back as well. The sudden Spirit hole will get some filler.
The higher fares allow the airlines to invest in premium experiences that their guests are craving.
@Matt — For a truly ‘premium’ experience, at a historically and statistically inflated but still ‘good deal,’ please consider… (@L737, he’s so close…)
Southwest’s prices are up a lot more than 25%. The airline is maximizing revenue now by spending down any remaining customer loyalty.
@Gary
Facts generated by the most corrupt Presidency since U. Grant.
Context is tough when you can’t afford groceries let alone airfare to fly across country when a relative dies.
@Steve — Ah, yes, no one forgets that ole sham… Crédit Mobilier…
@StarlessbBB. I find your argument with little merit. Airfares are down 20% adjusted for inflation in 10 years. “These higher airfares may look like a bargain to you, but us peons have to think twice before making travel plans.” So, what, 10 years ago you thought three or four times, given the higher cost, then? BTW, do they prople who embrace “it’s just a writeoff to you” understand has writeoffs work? I think not. So, if one is confused, if airfares go up 25%, it costs me 25% more to fly, and I can’t write it off. Assume Gary can. His net-of-tax costs went up, wait for it, 25% in the same time.
“I dont know what you are talking about. Last september i brought 2 biz class tickets DEL to SFO for usd 4800. Last week exactly the same flights are Usd 8000.” Gary is commenting on airfares iver time iver many routes. You cherry pick one and think it proves something?
@Matt – No, the high premium fares we’re paying that grossly exceed the marginal cost of providing said services, allow the airlines to invest in premium services.
An interesting factoid but ultimately doesn’t do much for the person buying the tickets in 2026. It all comes down to a) can I afford this?, and b) is it worth spending “this” amount for this flight? Airfares can be 90% less than they were 1, 5, 10, or 20 years ago but if there’s no money in the budget after rent/mortgage, CC payments, food, and gas, then there’s no money left to buy plane tickets. At least the top 10% of income earners got more tax cuts, right?
Hotel rates across the board in North America are still about 30% higher than they should be post-pandemic, maybe even 50% at many properties considering all the service and amenity cutbacks and deferred maintenance and renovations.
Base fares might be lower, but we were not nickel and dimed for baggage and seat selection a decade ago. Checked bags used to be $25-30 and seat selection was free. Now that two together are $100 per leg.
@Lefty – these are fares *inclusive of fees* as noted in the post
@Steve – where do you live. Just went grocery shopping at Walmart here in Texas and prices are right around where they were when 46 was gifted the office and inflation ran rampant. Blue states are doing everything they can to keep prices high to blame 47.
@Michael Mainello — Woah, coming-on too strong (“where do you live”). Buy him a drink first!
@This comes to mind — Most of your arguments have ‘little merit,’ too. (Doesn’t matter, though; you’re based in Ohio, and claim to not even read what I write on here… psh.)
@1990 – What can I say, tired of lies being spewed. Prices are down and inflation moderating. However you guys want to return to the 46 era inflation and shortages. Most of the issues are in the blue states whose policies are keeping prices high.
@Michael Mainello — “Be the (lies) you want to see in the world…”
Real prices should be adjusted for inflation. Hard to understand why people are arguing with Gary on this one.
In defense of US Grant, he did not personally profit from corruption in a pretty corrupt time and made a real effort to enforce the 14th Amendment. Also won the Civil War.
I’m not sure that giving airlines a pass for gouging passengers simply because they can is the way to go. If anything this illustrates that we’ve allowed far too much consolidation in the airline industry and allowing more unless it’s clearly beneficial to the flying public – like an Alaska/JetBlue merger – would be madness.
@Other Just Saying – “Real prices should be adjusted for inflation.”
So you’d be fine with paying $6,000 for a laptop, right?
@Christian – Dems, DSAers, Communists spew their lies to angry gullible people. My first Mac purchased in 1987 or so cost $3000 (not inflation adjusted). They are only interested in power and ruling over the masses. They will never live without, like their constituents will.
@MichaelMainello
I do all the ordering for the Quality department at a food manufacturing facility. I save all my PO’s and when I reorder I just update the prices and quantities.
petroleum ether:11/14/25-$599.65, 04/21/26-$1040
silver nitrate:02/02/26- $161.15, 07/29/26-$285.09
magnetically detectable pens: 04/21/26-$125.68, 06/25/26-$153.36
Aluminum clipboards:03/25/26-$19.99, 07/16/26-$20.79
I looked in my Marathon app and the price was $2.77/gal before the war started in February. Today it was $4.19 at the same gas station.
Inflation is real.
This is a duplicate, I removed a name:
@MM – I agree and thanks for your numbers. I am not denying inflation, both parties have it. My point is that with some exceptions, prices are moderating and with technology some have dropped. Look at electronics – computers and TV’s. I paid $1200 for a 45 inch TV in 2009, now they are $200. My 1987 $3000 Mac w/printer is $1000. Neither one of these are inflation adjusted. Should the DSA and Democrats scare there way back into office, there policies will drive those prices back up. Gas prices are higher than when 45/47 started his confrontation (hardly a war) with Iran. The regime has attacked western countries for 50 years thanks to the late peanut farmer. Intelligence believed they were very close to developing a nuclear weapon. That was unacceptable. 44’s idea was to throw cash at the regime, 46 wagged his finger and said “don’t”. Did they work, not sure. Will 45 / 47 work it out? Not if the Ds have there way.