Domestic Airfares Increased Less Than Inflation, According To Study

Forbes

4 days ago

Domestic airfares have remained relatively steady since 2019. getty
Despite inflation rearing its ugly head over the past six years, with the Consumer Price Index (CPI) up by 26% since 2019, domestic airfares have remained comparatively steady, increasing at less than half the rate of inflation over that time period. Since 2019, economy fares are up 10.7%, with business class fares up just 1.5%. In contrast, the cost of a dozen eggs surged by 80% during this time, while a loaf of bread increased by 44.6%, a gallon of milk went up by 32.2% and a gallon of gas increased by 21.9%.
The study tracked price changes for a range of items. FCM Travel
FCM Consulting, a division of leading travel management company FCM Travel, has released a new analysis comparing the cost of domestic airfare in the U.S. to the overall rate of inflation. The study tracked price changes for a range of everyday household items – including eggs, bread, milk, gas and more – from 2019 to 2025. A key measure of inflation across the U.S. economy, the CPI reflects the average change in prices paid by consumers for a market basket of goods and services. In May 2019, a standard basket valued at $1 rose in price to approximately $1.26 by May 2025.
Competition between air carriers has kept airfares at historically low levels, and has also led to better access to air travel for all Americans, according to Airlines.org. In fact, nearly 90% of Americans have flown, half of them before their 16th birthday. Since airline industry deregulation in 1978, domestic fares have dropped nearly 50% (adjusted for inflation, including fees), and now passengers have more choices than ever. From 2000 – 2024, the number of competitors per domestic air trip rose, as did passenger access to lower-cost carriers. In 2021 two new low-cost airlines entered the U.S. air-travel marketplace.
Airlines have been shifting their pricing strategies. getty
'In the U.S. aviation market, we continue to see strong competition among carriers, which has led to more stable airfare pricing over the years,' says Ashley Gutermuth, Head of FCM Consulting, Americas. 'Even as fuel prices and operating costs fluctuate, airlines have mostly avoided aggressive fare hikes on domestic routes in order to maintain yields and passenger load factors. Rather than raising base fares, airlines are instead shifting their pricing strategies and optimizing per-passenger revenue through optional add-ons and evolving loyalty program offerings.'
Frequent flyers can leverage airline loyalty programs by accumulating points or miles through flights and other purchases, then redeeming these for rewards like free flights, upgrades and other travel perks. These programs also offer benefits such as priority boarding, lounge access and exclusive deals, enhancing the overall travel experience.
In late January, travel demand began to slow. getty
Jason Kramer, FCM Consulting, Global Senior Air Consultant, says, 'U.S. airline pricing strategies have remained mostly stable since the end of Q1 2025. However, earlier in the year, there was a distinctive shift driven primarily by macro-economic conditions, and a couple of high-profile flight incidents. In late January, travel demand – both business travel and leisure – began to slow. In response, U.S. airlines started offering lower fares and maintained those lower thresholds much closer to departure dates, when historically airlines would raise fares for last-minute, on-demand business travel. This has led to more stable pricing in 2025, compared to previous years, which saw sizable year-over-year increases in fares.'
Airlines were quick to assess their capacity. getty
According to Kramer, as travel demand began to slow in early 2025 and has since stabilized, airlines were quick to assess their capacity (frequencies, aircraft type, markets, etc.) and trim to better align supply with demand. He adds, 'This, in part, has led to fare stabilization, and resulted in prices not being pushed even lower. Airlines, as is their nature, remain focused on trimming costs through capacity controls, employment levels and investments.' MORE FROM FORBES Forbes Explore Celestial Wonders Of The Night Sky At These Locations By Roger Sands Forbes Two Influential Women Hospitality Leaders Talk Shop By Roger Sands