Airfares are surging again after a months-long slump as carriers trim flights to ease a capacity glut
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The latest consumer price index report showed airfares jumped 4% in July from June, marking the first monthly increase since January.
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real estate
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August 16, 2025
07:28 PM
Fortune
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Travel & Leisure·Airline industryAirfares are surging again after a months-long slump as carriers trim flights to ease a capacity glutBy Jason MaBy Jason MaWeekend EditorJason MaWeekend EditorJason Ma is the weekend editor at Fortune, where he covers , the economy, finance, and housing.SEE FULL BIO The security checkpoint at John Wayne Airport in Santa Ana, CA, on Aug. 4.Jeff Gritchen—MediaNews Group/Orange County Register via Getty ImagesThe consumer price index report showed airfares jumped 4% in July from the prior month, reversing a slump that began early this year
That’s as airlines are reducing the number of flights, easing a capacity glut, while demand has rebounded after President Donald Trump’s trade war slowed travel during the spring
Supply and demand are coming back into balance in the airline industry, meaning airfares are shooting higher again after an ext downtrend
The consumer price index report showed airfares jumped 4% in July from June, marking the first monthly increase since January
For much of the peak travel season, consumers enjoyed lower prices
Airfares ticked down 0.1% in June and fell 2.7% in May from the prior month
But those days look to be over for now
Airlines are trimming flights more aggressively than usual as the summer winds down
Domestic capacity among U.S. airlines has dropped 6% in August versus July, according to data from Cirium cited by CNBC
That’s bigger than the cut of just over 4% during the same period a year ago as well as the 0.6% cut in 2023
And in the pre-COVID summer of 2019, capacity fell by 1.7% between July and August
The strike at Air Canada could throw another wrench into capacity as the carrier suspends operations
Canada’s top airline operates around 700 flights per day
Earlier this summer, airlines found themselves with too much capacity as their expectations at the start of the year for another travel boom slammed into President Donald Trump’s trade war in the spring
After he unveiled much steeper-than-expected tariffs in April, demand for flights slowed as consumers turned cautious the economy and their finances
To avoid flying empty planes, airlines slashed prices
But Trump pulled back from his highest levies and signed several trade deals
With some uncertainty easing, airlines have reported that demand is rebounding
In fact, security screenings at airports in July and so far in August are up from a year ago. “The world is less uncertain today than it was during the first six months of 2025 and that gives us confidence a strong finish to the year,” United Airlines CEO Scott Kirby said last month.Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world
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