Analysts and investors in the US fear the effect of the recession on aviation

Analysts and investors in the US fear the effect of the recession on 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 airlines in the US also report quarterly figures this week.

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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, purchasing power demand decreases 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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