Airfares in the U.S. fell 3.4% in December compared to a year ago on an unadjusted basis, according to data compiled by the Bureau of Transportation Statistics. Airfares were up 5.2% compared to the November level. Overall, core inflation was up 2.6% year-over-year during the month.
Forecasts for 2026 expect a modest rise in U.S. airfares of between 1% and 2%, although an economic downturn could shake up the airline sector. In general, airline capacity in the U.S. is expanding, helping to restrain sharp price spikes, despite ongoing aircraft delivery delays. The hosting of the World Cup in the U.S. during the summer of 2026 is anticipated to be a factor with airfares for some major routes.
The U.S. airline sector received its first earnings report of the Q4 season earlier in the day. Delta Air Lines (DAL) was lower in early trading after reporting mixed Q4 results and setting profit guidance slightly below expectations. The airline company reported operating revenue of $16.0B, operating income of $1.5B with an operating margin of 9.2%, pre-tax income of $1.5B with a pre-tax margin of 9.5%, and earnings per share of $1.55 for the quarter vs. $1.55 consensus and $1.55 a year ago. Looking ahead, Delta (DAL) guided for 2026 EPS of $6.50 to $7.50 (midpoint $7.00) vs. $7.20 consensus. “We expect another year of cost performance aligned to our long-term framework on capacity growth of approximately 3 percent, as we continue to drive efficiencies while investing in our people and the customer experience,” highlighted CFO Dan Janki.
Airline stocks: American Airlines (AAL), Delta Air Lines (DAL), Southwest Airlines (LUV), United Airlines (UAL), JetBlue Airways (JBLU), Alaska Air Group (ALK), Allegiant Travel (ALGT), Spirit Airlines (SAVEQ) (FLYYQ), Mesa Airlines (MESA), SkyWest (SKYW), Sun Country Airlines (SNCY), Republic Airways (RJET), and Frontier Group (ULCC).