Airfares soar 4% while carriers aggressively slash flights as demand wanes

Plane ticket prices are soaring as airlines slash flights to balance out a downturn in demand.

Airfares jumped 4% in July in the first monthly increase since January, according to the Bureau of Labor Statistics’ Consumer Price Index.

Carriers are slashing flights at aggressive rates, with domestic capacity among US airlines plunging 6% in August from the month before, according to data from Cirium.

That’s compared to a 4% cut in 2024 and just a 0.6% dip in 2023. Capacity fell 1.7% in the pre-COVID summer of 2019.

Demand for flights slowed dramatically after Trump unveiled steep tariff rates in April and several countries issued travel advisories against the US linked to an executive order recognizing only two sexes, “male or female.”

Nations like Denmark, Finland, France and Germany warned that the new requirement could cause complications for individuals with different gender designations on their passports or visas.

To avoid flying empty planes, airlines slashed their prices in an attempt to woo customers – down 0.1% in June after dropping 2.7% in May.

Though there’s still uncertainty around Trump’s trade war, tariffs on foreign nations are largely lower than the rates announced in April and several deals have been reached with key trade partners like the European Union.

Security screenings at airports are up in July and August in a sign that demand is rebounding.

“The world is less uncertain today than it was during the first six months of 2025 and that gives us confidence about a strong finish to the year,” United Airlines CEO Scott Kirby said last month.

The most recently available data shows that visits to the US fell 3.1% in July, fueled by steep drops from Germany, China and Switzerland – down 14.7%, 13.8% and 12.7%, according to the National Travel and Tourism Office.

Travel from Canada and Mexico was not included in the data, though both have seen steep drops in recent months.

Outraged Canadians, in particular, have canceled their trips to the US, offended by Trump’s threats to annex the country as the “51st state.”

In June, flights from Canada were down 22% and car crossings were down 33%, according to a report by travel publication Skift.

April was the only exception to the downward trend, possibly because Easter fell in April instead of March this year. Overseas visitors ticked up 0.4% that month, but have been down since then.