Thai Airways is selling its fleet of Airbus A380 planes.
28.09.2023 - 00:08 / skift.com / David Neeleman / Edward Russell / Helane Becker / Brian Sumers / Airlines
U.S. airlines have scheduled too many flights this fall for the number of travelers, Breeze Airways founder and CEO David Neeleman said. This is pushing down airfares just as fuel prices are rising and putting pressure on airline profits.
“There’s a lot of people traveling [this fall] but you just have to fill that extra 20% of seats,” he told The Airline Observer founder Brian Sumers at the Skift Global Forum in New York on Wednesday. “Fares have come down as fuel prices have gone up, and that’s challenging.”
U.S. domestic airline seats are scheduled to increase nearly 8.4% from 2022 levels in the fourth quarter, according to Cirium Diio schedule data. That comes after a 8.6% increase in the third quarter. Compared to 2019, capacity will be up 2.5% in the September quarter and 4% in the December quarter.
The number of travelers was up on average 3% from 2019 levels this month, according to the latest Transportation Security Administration screening data.
At the same time, the price of jet fuel was up nearly 50% to $3.17 per gallon on September 26 from its bottom in May, according to data from airline industry trade group Airlines for America (A4A). Fuel and labor are the two largest expenses for airlines.
Neeleman is the latest executive of a U.S. budget airline to highlight weak travel demand this fall. Frontier Airlines and Spirit Airlines surprised the market earlier in September when they both forecast losses in the third quarter, which is historically a strong end-of-summer travel period. They cited increased “promotional activity” — in other words, fare sales — weak close-in bookings, and the rise in fuel prices for their outlooks.
Demand is “soft but we’re looking forward to a good winter,” Neeleman said.
When asked about Breeze’s own fare sales, he cited travel demand as well as the airline’s need to promote itself in new markets. Breeze launched in May 2021 to much fanfare and has expanded rapidly in the past two years; Cirium Diio schedules show it flying nine-times more capacity this year than it did two years ago.
Breeze is privately held and does not disclose profits or losses.
The trend seen by Breeze, Frontier, and Spirit this fall differs from that seen by the major U.S. carriers. American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines, which combined carry about 80% of U.S. fliers, have said travel demand remains strong. They have, however, lowered profit forecasts owing to higher fuel expenses.
“The ultra-low-cost airlines [Frontier and Spirit] had more dire warnings than their larger legacy competitors,” TD Cowen airline analyst Helane Becker wrote in a recent report. “We believe this is likely due to their outsized exposure to price-sensitive consumers … These
Thai Airways is selling its fleet of Airbus A380 planes.
Travel demand to Turkey, an increasingly popular tourist destination, remains strong even as post-pandemic “revenge travel” ends, Pegasus Airlines CEO Güliz Öztürk said.
Delta Air Lines hit a nerve with loyal fliers, arguably its most important customer bases, when it upended elite status qualification in its SkyMiles loyalty program last month. Customers provided the carrier with ample feedback of what CEO Ed Bastian described as a “360 [degree] view” of the controversial changes.
A British Airways flight was forced to make a U-turn when it was minutes away from landing at Tel Aviv's Ben Gurion Airport on Wednesday.
It comes after other carriers, such easyJet and Wizz Air, halted flights to and from Tel Aviv following Hamas’ surprise attack on Israel on Saturday. Fighting is now into its fifth day after Israel declared “war” against Hamas following the attacks. More than 2,200 people on both sides have died. The UK Foreign Office has advised against all but essential travel to Israel and Occupied Palestinian Territories due to the conflict. Virgin Galactic Virgin Galactic is to stop its flights to Tel Aviv for the next 72 hours. A Virgin Atlantic spokesperson said: “The safety of our customers and our teams is our number one priority, always. After careful consideration, based on latest information, we have taken the decision to pause flying to and from Tel Aviv for the next 72 hours. “As the dynamic situation evolves, we’ll keep our flying programme under constant review. “Our teams will be in contact with any affected customers to discuss their options, which include rebooking to a later date or a full refund. “We would advise anyone booked to travel to check their flight status on the website before travelling to the airport.”
Chase cardholders should check their accounts for a generous new travel offer.
Bain Capital-owned Virgin Australia said on Tuesday that the airline returned to a profit for the first time in 11 years for fiscal 2023, buoyed by a strong recovery in travel demand following the COVID-19 pandemic.
Breeze Airways is adding a new route from Long Island, New York.
If you know me, you know how much I love planes, and as an AvGeek to the core, it gives me joy to share my love of everything aviation.
Low-cost airline Breeze Airways is continuing to expand with a new flight from New York to Florida in time for a warm-weather winter escape.
Despite the naysayers, Breeze Airways founder and CEO David Neeleman doubled down on the ultra-low-cost carrier's long-term viability during a Q&A at the Skift Global Conference in New York City on Wednesday.
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