Travelers walk through O’Hare International Airport in Chicago on December 20, 2024.
Kamil Krzaczynski | AFP | Getty Images
This year, higher airfares are preserving as strong demand even during the winter dead, prompting airlines with limited capacity growth to extend pricing power.
This month, fare tracking platform Hopper said domestic “good value” U.S. airfares in January were up 12% over last year, with more domestic flights than last year through at least June. Ta.
Postponement of new aircraft from boeing Airbus, air traffic constraints and financial pressures limit the airline’s ability to expand flights and drive up fares. The most dramatic case was Spirit Airlines, which filed for Chapter 11 bankruptcy protection in November and cut flights to cut costs.
american airlines On Thursday, it predicts a 5% revenue jump in the first quarter over the same three months in 2024, but capacity will flatten or fall another 2%.
“We’re hopeful that airfare will come into play,” American Airlines Chief Financial Officer Devon May said in an interview. The airline has disappointed investors with expected increases in costs, including wage increases from new labor contracts signed last year, although the airline forecast wide expectations for the first quarter. .
Startup carrier Breeze Airways on Thursday reported first-quarter operating profit and founder David Neeleman for the fourth quarter. JetBlue Airwayssaid conservative industry growth is on track for future results.
“The tide is lifting a lot of boats,” he said in an interview. “We are exceeding our revenue goals. The momentum we saw in the fourth quarter has continued into the first quarter.”
alaska airlines It said late Wednesday that first-quarter revenue growth is expected to rise by a “high single-digit” percentage point with capacity below 3.5%.
united airlineswhose first-quarter revenue forecast far exceeded analysts’ expectations, shared a similar sentiment, especially for domestic travel.
“The domestic pricing environment is improving. Underserved carriers will remove unprofitable capacity at increasing rates and business traffic growth will accelerate,” United’s chief commercial officer said. CEO Andrew Nocella said on the company’s earnings call on Wednesday. “Industry fare sales are less common due to lower discount rates as airlines prioritize profitability.”
delta airlineswhich kicked off airline earnings season earlier this month, predicted first-quarter revenue growth of 7% to 9%, with unit sales increasing across its globe-spanning network.
Off-season travel, especially to Europe, is a big bright spot for large U.S. airlines. For example, Delta President Glenn Hauenstein said on the Jan. 10 earnings call that the transatlantic unit’s earnings should make a moderate number in demand. The peak of the result. ”
Carriers are also seeing more customers buying for wider, more expensive seats.
JetBlue Airways and southwest airlines We will report our fourth quarter results and provide our outlook for 2025 next week. Both carriers are looking to cash in on newer premium seats and debut other amenities.
