Airfares are finally starting to cool as peak summer travel season fades. Now what?

Passengers are seen at the Delta Air Lines check-in counters at Hartsfield-Jackson Atlanta International Airport ahead of the Fourth of July holiday in Atlanta, Georgia, July 1, 2022.

It is possible that flights are getting cheaper.

The latest US inflation data shows thatAirfares fell from May to June. When consumer prices rose at the fastest rate in more than four decades, fares declined.

The surge in spring and summer travel, even at sky-high prices, has been a boon to airlines, according to reports from major carriers.

As carriers and travelers grapple with persistent inflation and worries about an economic slowdown, how will demand be after the summer peak?

Consumers are spending a lot of money on travel, according to CEOs from Delta to JP Morgan. Household vacations budgets can be affected by rising costs.

Some travelers are changing their plans due to high fares and a jump in costs.

Ben Merens, a 62-year-old communications consultant, said he and his wife called off their summer vacation because of a family emergency.

The couple had their sights set on a trip to either Denver or Seattle, but weren't going after a death in the family meant last-minute tickets from their home in Milwaukee to New York City to attend the funeral.

Merens said the price was too high before their return flight.

When the summer travel season ends, ticket prices tend to go down as children return to school and families end vacations. Airlines adjust capacity for lower demand periods so they aren't flooding the market with seats they need to offer at low fares.

The average cost of a U.S. flight as of July 14 was $375, down from a May peak of $413 but still up from last year.

The desire to travel from both businesses and leisure travelers has led airlines to be optimistic about future sales.

Ed Bastian, CEO of Delta, said during the company's quarterly earnings call that people have not had access to the product for two years. In a busy summer period, we won't satisfy that thirst.

The company posted a $735 million profit in the second quarter on $13.83 billion in revenue, a 10% increase from the same period of 2019. Domestic corporate- travel sales have been a lagging indicator of the industry's recovery.

Delta is expecting revenue to grow at a slower rate in the third quarter. The carrier expects revenue to increase by 1% to 5% over the course of the year, but will limit schedule growth through the end of the year in order to keep fares low.

The crystal ball is only three to four months old and it doesn't go all the way as far as people would like us to think. Everything tells us that we need to run.

American and United Airlines are expected to report second-quarter results and give outlooks on Wednesday and Thursday. American forecast second-quarter revenue growth of 22.5% over the same period last year, up from its previous estimate for an increase of 20%.

As the peak travel season fades, airlines will have to deal with cracks in the red-hot job market and worry about economic weakness.

The impact of cost inflation on consumers and corporate travelers' discretionary income and budgets could lead to a decline in aggregate demand for air travel. The current capacity constraints would prevent the airlines from having too much capacity.

U.S. airlines have largely reduced their schedules after cutting back on calories. Staffing shortages and other challenges forced carriers to dial back on flights.

All of the airlines capped flying.

The seasonal decline in flights could help airlines improve operations and give them more room to train their new workers.

Delta has hired 18,000 people since the beginning of the year, which is close to the number it lost during the Pandemic.

Bastian said on the company's quarterly call that the company has thousands in some phase of hiring and training.

Southwest Airlines said this week that it has hired 10,000 people since January to increase its employee base.

Southwest's senior vice president of people, learning and development said "hiring and training will remain a focus throughout 2022,"

traveler concerns over delays and disruptions could be alleviated by smooth operations. Higher costs are passed on to consumers when flying less.

The full cost of the airline is mostly carried by us.

There were many bargains early in the Pandemic when most potential travelers stayed home.

A decline in consumer spending or a downturn in the labor market could cause fares and airline revenue to go down.

Adam Thompson said that people just have money to burn. People don't have money anymore, so you have to convince them to buy your product.