US air travel demand hit by soaring oil prices
US airfares surged 2.7% in August and 23.4% year-on-year, with TSA throughput down 3.2% from last year, as rising oil prices due to geopolitical tensions impact demand.
96% Welcome to the home for real-time coverage of markets brought to you reporters. S. and Israel fired the opening salvo in their war on Iran, oil prices have soared, in recent days breaching the psychologically significant $100 per barrel level. The war has lasted longer than many estimated at the onset, and upward pressure on energy prices has seeped into other areas of the economy, including agriculture, manufacturing and consumer goods.
Commercial airlines belong at the top of that list. While the S&P 1500 Airlines Index remains up more than 4% year-to-date, that's in spite of a precipitous 17% drop so far this quarter. The broader market has advanced well over 12% so far this year, triple the SPCOMAIR's advance over the same time frame. 6% on Monday, while WTI crude is off around 5%.
4% year-on-year. So has that affected demand? Yes, it appears so. The press release accompanying the Conference Board's most recent consumer confidence report says consumers anticipated spending less on many travel-related activities within the next six months, including air travel.
A look at the Transportation Security Administration (TSA) data shows that over the seven days ended September 20, an average of 2,397,613 travelers emptied their pockets into plastic bins at airport security checkpoints. 7% from the same stretch of days in 2024. The graphic below pits TSA throughput data against the SPCOMAIR, with CPI's year-on-year airfare growth thrown in for good measure: (Stephen Culp) *** Earlier On Live Markets: Can Ai Be Kept Safe Without Handing The Keys To Big Tech? Click Here The End Of Immaculate Disinflation?
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