U.S. Domestic Fares Plummet

After profiting from sky-high airfares during the initial recovery from the Covid-19 pandemic, U.S. airlines are now facing challenges with lower domestic fares. As carriers' schedules increase and travelers choose overseas destinations over closer ones, airlines such as Southwest Airlines, Alaska Airlines, and American Airlines forecast slower revenue growth or weakness in the third quarter, despite strong demand. Domestic U.S. airfare is currently down 11% from last year and 9% from 2019, with an average round-trip ticket costing $258, according to fare-tracking company Hopper. In contrast, international tickets are up 8% from 2022 and are 23% more expensive than 2019, averaging $958.