The Chief Executive Officer of United Airlines said last week that the current plan being considered by the United States to reimburse passengers impacted by delays and cancellations could make flying commercially less safe.
06.09.2023 - 13:37 / skift.com / United / United Airlines / Southwest Airlines / Airlines
Three U.S. airlines on Wednesday warned of higher fuel costs in the third quarter due to a jump in crude prices, adding to pressures the industry faces from expensive labor contracts.
Shares of Southwest Airlines fell 4.1%, United Airlines was down 1.3% and Alaska Air Group edged lower about 1% before the bell.
U.S. airlines do not generally hedge against fuel costs, making them vulnerable to price swings. However, strong travel demand over the last two years has allowed them to mitigate such cost pressures.
But there are early signs that domestic travel demand is weakening, as inflationary pressures hurt consumers when carriers are grappling with costly contracts handed out to retain workers.
Since mid-July 2023, jet fuel prices have climbed over 20%, United said in a regulatory filing. The airline expects all-in fuel price per gallon to be between $2.95 and $3.05, up from its prior forecast of $2.50 to $2.80 per gallon.
It did not outline any impact to profit, but the company is scheduled to speak at a conference later in the day.
Southwest Airlines, the largest U.S. domestic carrier, said it expects revenue per available seat mile – a proxy for pricing power – to fall 5% to 7% in the current quarter. It had earlier forecast a 3% to 7% fall.
Alaska Air, meanwhile, expects an adjusted pre-tax margin of 10% to 12% in the third quarter, lower than its prior expectation of 14% to 16%.
The Washington State-based company also revised its estimate for revenue growth in the third quarter to 1% to 2%, from flat to 3%.
The forecasts come at a time when changing travel patterns due to shifting post-pandemic consumer habits have also increased airlines’ operational costs.
American Airlines and Delta Air Lines were also down about 1% each, premarket.
The Chief Executive Officer of United Airlines said last week that the current plan being considered by the United States to reimburse passengers impacted by delays and cancellations could make flying commercially less safe.
There are problems at two of the nation’s top five airlines. Labor problems.
Jack Ieronimo was one of the people on a United Airlines flight from Newark, New Jersey, to Rome, Italy, that made headlines after passengers said they were stuck onboard for seven hours without taking off.
When travelers buy an airplane ticket, they’re often made aware of the carbon emissions from their trip. Google Flights and some airlines give fliers an estimate when they check fares, and carriers like British Airways and Qantas offer customers the option to buy carbon offsets or contribute to a “climate fund” in the booking process.
Southwest Airlines recently made changes to its pre-flight boarding policies by limiting the options for passengers to purchase a better spot in line for an extra fee.
There is a shortage of a critical skilled labor group needed to keep America’s airlines flying: Pilots, particularly captains, are in short supply and that’s resulting in fewer flights to some of the smallest cities across the country.
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