The U.S. airline sector recorded another stellar year in 2022, exceeding 2019 passenger revenue. According to Phocuswright’s latest travel research report U.S. Airline Market Report 2022-2026, 2022 saw record-breaking leisure demand, but also capacity restraints and catapulting fares. Eager passengers acquiesced to the higher prices. The anticipation of seeing friends and family or returning to business meetings and events offset worries about inflation, labor shortages and (often) substandard service, which still plagued the airline industry in 2022.

Nevertheless, the segment now represents 42% of the U.S. travel market gross bookings, compared to 45% for hotels.


Looking ahead, Phocuswright has identified 4 key areas impacting the U.S. air market:

The price-service gap widens

Airlines - and their passengers - suffered from severe operational challenges in 2022, which will have continued into 2023. The problem won't be fixed any time soon as airlines face high fuel prices and costs of capital amid continuing supply and labor shortages, limiting their ability to add network capacity.

Business travel becomes blended travel

Airlines have more than made up for the loss of business travel. They have benefitted from the increase in blended (business/leisure) travel - evidence of the new work/life balance that many people seek.

Merchandising moves the needle

NDC and like technologies are still nascent, but the promise of offering creative and personalized options to customers could not come at a better time as airlines continue to recover from the operational woes of 2022.

Shortages, inflation remain top challenges

Compared to 2022 growth, airlines anticipate a slowdown in 2023 and are tightly managing capacity. Despite the gloomy economic outlook, U.S. airlines remain optimistic about 2023 due to the resilience of leisure travel and the return of business travel, meetings/events, and international trips.