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Cost of Airline Tickets Starting to Climb

Airfares are going up for the first time in years. During the first week of July, Delta Air Lines reported that its passengers paid higher fares on average in the second quarter of this year for the first time in more than two years.


People flying Delta paid about 1% more to fly, and Delta forecast that fares would rise an additional 2.5% to 4.5% in the current quarter. Delta’s announcement follows American Airlines’ report of higher fare growth. U.S. airlines have been trying to raise fares in recent years, despite full planes. Low fuel costs led airlines to add additional flights, which drove down fares.

Now with strong demand for air travel and steady job growth, airlines are looking to raise fares. For Delta, fuel costs rose 18% compared to a year ago, and labor expenses rose 9% following a labor deal with pilots that was reached late last year that gave them significant pay hikes. Delta also said the April storms in the Southeast that forced it to cancel thousands of flights cost the airline $125 million. Raising fares is an attempt to get some of that money back.


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