From January to February, airfares dropped 4%, according to the Consumer Price Index. The decline in airfares, which is adjusted to account for normal seasonal price trends, is the first since July.
The Consumer Price Index data jibes with U.S. airlines this week reporting a weakening in domestic demand, driven by economic uncertainty, declining consumer confidence, Trump administration tariffs and mass federal government layoffs.
Delta, Southwest and American lowered their first-quarter forecasts in regulatory filings submitted Monday and Tuesday, while United CEO Scott Kirby said at Tuesday's J.P. Morgan Industrials Conference that United expects first-quarter results near the bottom end of its forecasted range.
Airfares fell 1.2% in February, not accounting for seasonality. Compared to February 2024, airfares were down 0.7%.
Year-over-year airfares in January had been 7.1% higher, fueling earlier forecasts of high prices that would last well into the year.