Frequent Flyer: May US Airfares Up Y/Y, May International Travel Slightly Down Y/Y, LUV and SIA Announce Interline Partnership, AAL and Google Announce SAFc Agreement

Research evidence excerpt

Frequent Flyer: May US Airfares Up Y/Y, May International Travel Slightly Down Y/Y, LUV and SIA Announce Interline Partnership, AAL and Google Announce SAFc Agreement

Update

June 16, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMAirlines | North America Ravi Shanker

Equity Analyst

Frequent Flyer: May US Airfares Ravi.Shanker@morganstanley.comMadison J Pasterchick +1 212 761-6350

Research Associate

Madison.Pasterchick@morganstanley.com +1 212 761-3787

Up Y/Y, May International Travel Nancy Hipp

Nancy.Hipp@morganstanley.com +1 212 761-1311

Slightly Down Y/Y, LUV and SIA

Airlines

North America

Industry View AttractiveAnnounce Interline Partnership,

AAL and Google Announce

SAFc Agreement

May US Airfares increased seq. and over 25% Y/Y while

International Travel ticked down Y/Y for both US and non-US

travelers. Last week, LUV and Singapore Airlines announced

interline single-ticket offerings and AAL and Google announced

an SAFc agreement for 35M gallons of SAF for next 3 years.

May US airfares increased seq. and are up over 25% y/y. According to the US

Bureau of Labor Statistics, airline fares were up 2.7% m/m in May and up 26.7% y/

y (on a seasonally unadjusted basis), which again is a notable step up in y/y growth

rates (April was up ~20.7% y/y and March was up ~14.9%). This over 25% y/y

increase marks the highest level of growth since December 2022 and comes as no

surprise following airline commentary that has continued since 1Q in which all

airlines have noted ability to pass through fare hikes to combat fuel prices. We

would expect these elevated levels to continue and believe we will likely see

another DD increase in June and through the summer months. With demand

continuing to look robust and jet fuel sharply normalizing toward pre-conflict levels,