March 28, 2023

Taylor Daily Press

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Analysts and investors in the US fear a slowdown in aviation

Analysts and investors in the US fear a slowdown in aviation

Fares for US airline tickets rose 33 percent last August, more than inflation in the United States. According to the Rueters news agency, airline tickets are “one of the biggest drivers of consumer price increases.”

Meanwhile, American Airlines says it posted higher profits in the third quarter as it was able to offset higher costs with higher ticket prices. Other US airlines also report quarterly figures this week.

America, like everywhere else in the world, is currently struggling with rampant inflation. So the central bank, the Federal Reserve, has raised interest rates sharply. As a result, demand for purchasing power declines altogether and economic growth slows down.

Analysts at Jefferies, a New York-based financial services provider, told Reuters that aviation would feel the effects of the policy. “We struggle to stay positive as the central bank aggressively targets airfares as part of inflation containment,” Jefferies wrote in a statement.

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