From CNBC:

Airfare dropped 6.4% in January compared to the previous year, despite challenges such as aircraft deliveries, congested airspace, and engine recalls. Airlines had previously discounted flights due to increased capacity, but airlines such as Southwest and Alaska have moderated growth. Demand is expected to remain high, with Delta CEO Ed Bastian noting a shortage in aircraft repairs.

Boeing 737 Max 9 planes were grounded due to a midflight blowout in January, causing capacity constraints. The planes have since returned to service, but the Federal Aviation Administration has stopped Boeing from increasing production. This has led to airlines like Alaska reconsidering capacity growth forecasts, and United Airlines CEO Scott Kirby expects challenges ahead due to the industry’s operating environment and capacity adjustments.

Total global traffic has rebounded to 94% of pre-pandemic levels in 2023. The International Air Transport Association reports optimism for strong pricing as airlines forecast robust demand even in the domestic market. Despite the capacity constraints and industry-wide challenges, the rebound in air traffic is a positive indicator for the travel industry.



Read more: Airfare is down, but here’s why that may not last for long