Summer Travel Takes a Hit as Airfares and Fuel Costs Climb

The peak summer travel season in the US is shaping up to be a disappointment, with rising airfares and stubbornly high petrol prices keeping millions of Americans at home. The latest blow came after President Donald Trump declared an end to the ceasefire with Iran, sending crude oil prices up nearly 5 percent in a single day and reigniting fears of sustained fuel cost increases. What should have been a bustling period for airlines and road trips is now looking much quieter.

The slowdown was already visible over the July 4 holiday weekend, when TSA checkpoint numbers fell 2.3 percent from last year, with just over 7.3 million passengers screened. A recent NPR, PBS News, and Marist College poll found that 45 percent of Americans are skipping a summer holiday altogether, citing the high cost of flying and driving. That is a 2 percent jump from the same time last year. Even the FIFA World Cup, which was expected to boost travel within North America, has not reversed the trend, with most game attendees being domestic US travellers.

Airlines have been warning about the pressure for months. United Airlines announced in April it would need to raise fares by as much as 20 percent due to fuel costs, while American Airlines trimmed some routes for August and September. Spirit Airlines, a budget carrier, shut down entirely in May, blaming geopolitical conflicts in bankruptcy filings. Airfares in the US have risen 8.2 percent since February, according to the Department of Labor. Industry analysts say the situation could drag on, with John Deal of Post Oak Group noting that airlines earn up to 40 percent of their annual revenue during summer, making any disruption particularly painful.