Airfares continued to fall in December

Airfares dropped significantly in December, even when adjusted for typical seasonal variations. 

According to Consumer Price Index data released by the Labor Department on Thursday, December airfares were down 8.2% from the prior month. When adjusted for seasonality, the decline was 3.1%.

The drop followed seasonally adjusted declines of 3% in November and 1.1% in October. 

Still, airfares in December were 28.5% higher than December 2021, the Consumer Price Index shows. 

  • Preview 2023: Airlines

The price drop did not appear to slow down American Airlines in the fourth quarter. AA submitted a regulatory filing Thursday reporting that total revenue for the quarter will be up an estimated 16% to 17% compared to the fourth quarter of 2019. In earlier guidance, American had expected revenue to be 11% to 13% above the 2019 level.

American says its operating margin for the fourth quarter will be 10.25% to 10.5%, up from its previous guidance of 5.5% to 7.5%.

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