U.S. airline bookings slipped 2.3% in May from a month earlier, the second consecutive monthly drop this year, while fares soared over 2019 levels, according to an Adobe report published Tuesday.
Consumers spent $8.3 billion on domestic tickets last month, up 6.2% from April.
So far this year, consumers spent more than $37 billion for domestic flights, almost double what they spent in the first five months of last year, when Covid-19 vaccines were just becoming widely available.
“While some consumers have been able to stomach the higher fares, especially for those who delayed travel plans during the pandemic, the dip in bookings shows that some are rethinking their appetite for getting on a plane,” Vivek Pandya, lead analyst at Adobe Digital Insights, wrote in the report.
Airfare has surged thanks to high fuel prices, labor shortages and red-hot travel demand after two years of the Covid pandemic, marking one of the most dramatic examples of rising inflation this year.
Bookings have been mostly resilient, though it’s unclear whether demand will last beyond the peak spring and summer travel season, when airlines make the bulk of their annual revenue.
“We have yet to see any cracks in airline bookings, and investors remain concerned about a potential slowdown post peak summer travel,” Andrew Didora, airline analyst at Bank of America, wrote in a note Monday.
Airlines cheered the Biden administration’s decision last week to lift a Covid-19 testing requirement for inbound international travelers. Didora said the shift could further fuel international bookings.
United Airlines on Monday said that searches for international trips rose 7% in the 72 hours since the White House announced it would scrap the international testing requirements, noting the “majority of searches by U.S. travelers were for near-term travel this summer to destinations in Europe, Mexico and the Caribbean.”
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