Cheaper flights coming? Cost of airfare falls as overall inflation slows down
There's relief in sight for inflation-weary Americans.
Average airfare fell 8.1% in June from the month before; it also dropped a whopping 18.9% over the same month last year, according to data released by the Department of Labor in its monthly Consumer Price Index report on Wednesday.
The decrease in fares comes amid record-breaking travel demand, suggesting the possibility that the trend of so-called "revenge travel" following coronavirus pandemic reopenings is beginning to wane.
Fares began climbing in 2021 before soaring last summer. This was partly a result of the pent-up demand from the pandemic and because Americans had more cash savings available than normal due to limits in certain types of spending during the pandemic. With staffing and equipment shortages, airlines struggled to add enough supply to meet the demand. A surge in fuel prices linked to the Russian invasion of Ukraine also contributed to higher prices.
As fares ease, the airline industry is in overall better shape, despite ongoing hurdles linked to persistent bad weather and a shortage of air traffic controllers.
As recently as late last year, airfare topped the CPI report as an inflation leader, with ticket prices climbing nearly 43% over the previous year.
Related: 6 key tools and tips to find the cheapest airfare
However, last year's price changes come with an asterisk. In 2022, there was a strong travel demand. In 2021, vaccines were still being rolled out, and many countries still imposed at least limited travel restrictions to try and slow the spread of the virus. So, drawing a comparison between the two years inherently doesn't tell the full market context.
This year, though, the report is generally more representative of true conditions, as there are similar demand trends year over year.
The overall CPI climbed 3% for June, a major slowdown representing a significant slowing of inflation.
Even as airfare drops overall, many flights — particularly on international routes and during peak times — remain relatively pricey. Still, as was the case this spring, there are still plenty of deals to be found.
Related: When is the best time to book flights for the cheapest airfare?
Be sure to follow TPG for the latest airline deals and guides to finding the cheapest airfare, alongside tips and tricks for maximizing points and miles to lower the cost of your next vacation.
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Rewards Rate
| 2X miles | 2 miles per dollar on every purchase |
| 5X miles | 5 miles per dollar on flights and vacation rentals booked through Capital One Business Travel |
| 10X miles | 10 miles per dollar on hotels and rental cars booked through Capital One Business Travel |
Intro Offer
Earn 200K miles when you spend $30K in the first 3 months, and an additional 200K miles when you spend $150K in the first 6 monthsLIMITED-TIME OFFER: Earn up to 400K bonus milesAnnual Fee
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Why We Chose It
The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
- The Capital One Venture X business card has a very lucrative welcome offer.
- In addition, the card comes with many premium travel perks such as an annual $300 credit for bookings through Capital One Business Travel.
- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month