Airlines Are Thriving as People Keep Traveling

Three major airlines in the US are seeing increased profits due to strong demand, high fares, and low fuel prices.

Airlines Are Thriving as People Keep Traveling

The summer travel season is off to an incredibly fast start. There are no signs of slowing down on the horizon. Airlines are doing everything they can to keep pace, including battling bad weather and congestion on the ground and in the air.

American Airlines, Delta Air Lines, and United Airlines are three of the largest airlines in the United States. They set quarterly records in the last three months ending in June. The three companies' profits more than doubled when compared to the same period in the previous year. They also raised their estimates for what they will earn this year.

Vasu Raja told reporters and investors in a conference call on Thursday that the demand for American products is still very high.

The travel industry has recovered well from the pandemic. The month of June was slightly more busy than the same period in 2019. July is on track to match pre-pandemic traffic. The Transportation Security Administration (TSA) screened almost 2.9 million passengers on the Friday prior to the Fourth of the July weekend.

It has handled the most in a day.


The recent recovery has been plagued by problems including delays and cancellations across the country.

In the last two years, the air traffic system and airlines have been struggling to cope with bad weather, technological problems, staffing shortages, and other disruptions. This has contributed to major meltdowns, such as the one Southwest Airlines experienced over a period of several days late in December. Air travel has been disrupted for days by delays and cancellations that have cascaded.

The weather has caused nearly 70% of all flight delays this year compared to just over 61 percent in the same time period last year.

According to federal data

Traffic delays have also been caused by heavy traffic.

United Airlines struggled to recover from a recent disruption that occurred before the 4th of July. It initially blamed bad conditions and a shortage of air traffic control personnel at its hub, Newark Liberty International Airport. Other airlines in the area did not have as much trouble. FlightAware, a provider of aviation data, reported that in the week before the holiday weekend the airline cancelled or delayed over 51 percent of its flights.

FlightAware data shows that, overall, about 1.8 per cent of scheduled flights were cancelled in the past two months, compared to 1.9 per cent in the same period last year. Many more flights were delayed, about 25 percent during the last two months compared to 19 percent for the same period of 2019.

Airlines have said they are taking steps to avoid disruptions. This includes spending on hiring, training and technology. United Airlines announced that it would reduce its flights during peak hours, increase the number of gates, and make other changes after recent problems.

Scott Kirby is United's Chief Executive. He said: "We are now doing more than we have ever done to minimize the impact of weather conditions, congestion, and other infrastructure constraints in Newark."

Airlines say that domestic travel is still strong and has been for some time.

More Americans are travelling overseas


American reported that international passenger revenue increased by nearly 22 percent compared to the same quarter of last year. Delta announced it had set a new record for international revenues in the second quarter. United announced this week it will add more flights in Asia for October.

Hopper, an app for travel, says that a roundtrip international flight costs on average $971. This is up by nearly 24 percent compared to the price at this point in 2019.

The rising fares for airlines have been good, and American Delta and United expect that the good times will continue. Delta, for instance, expects its revenue to increase by at least 17 percent from last year.

The price of tickets spiked last year as airlines struggled with demand, and the Russian invasion of Ukraine drove up jet fuel prices. Fuel prices are now down. American spent about a third less than it did last year on fuel in the second quarter, saving $1.3 billion.

According to Hopper, this is one of the reasons why the average domestic round-trip flight price on Thursday was more than 13 per cent lower than the same day in 2018 and more than nine percent below 2019. The average price of a round-trip domestic flight dropped by more than 13 percent, to $261 on Thursday from the same day last year and more than 9 percent from 2019, according to Hopper.

Contributed to a decrease in inflation overall


While fuel prices are down, labor costs have risen. American reported that it spent 12 percent more in the second quarter on salaries, wages, and benefits compared to last year. The airline is currently negotiating with its pilots union a new contract that will include substantial pay increases.

Pilots from United Airlines spent the weekend in training.

Reaching an agreement

American has agreed to match the increase of up to 40% over a period of four years. In March, Delta pilots approved a contract.

Would you increase your wages?

By 2026, 34 percent of the population will be living in poverty.

United and American also negotiate contracts with unions who represent their flight attendants.