Broader economic concerns are overshadowing continuing consumer appetite
A passenger walks past a Delta Airlines 747 aircraft in McNamara Terminal at Detroit Metropolitan Wayne County Airport in Romulus, Mich. on Jan. 21, 2010.It should be the best of times for U.S. airlines with a travel boom still going strong, but investors are nervous demand may soften as the economy falters, making it harder to protect profits from soaring costs.
Strong demand from travelers has so far allowed carriers to mitigate inflationary pressure with higher fares. While both United and Delta said travel demand is holding up, double-digit declines in airfares year-over-year suggest airline pricing power has peaked. Airlines are likely to see “a more dramatic negative effect” than in the past if there is any downturn in demand because their cost of doing business has gone up materially, Mulberry said.
United, which has not forecast profit for 2024, on Tuesday similarly said travel demand remains “strong and steady.” Similarly, United projects its average fuel bill will increase by 11% in the December quarter from a quarter ago.New Chief Financial Officer Michael Leskinen told investors on Wednesday the company’s non-fuel operating costs in the fourth quarter would rise by about 1.5 percentage points if its flights to Tel Aviv remain suspended through the year.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Drone attack on base hosting U.S. troops intercepted in Iraq, heightening fears of a broader conflictTwo drones launched at a base hosting U.S. troops in western Iraq were intercepted Wednesday, a U.S. defence official said.
Read more »
Oil jumps as Iran increases rhetoric against Israel, US stockpiles dropOil jumps almost 2% as worries of a broader conflict in the Middle East intensifies.
Read more »
Bank of Canada publishes staff note on DeFi, highlights challenges and risksThe Bank of Canada published a new staff note on DeFi, outlining the benefits and risks involved with its use and integration into the broader financial system.
Read more »
ChatGPT Creator Partners With Abu Dhabi’s G42 in Middle East AI PushOpenAI, the creator of ChatGPT, is teaming up with Abu Dhabi’s leading artificial intelligence firm as part of an expansion within the United Arab Emirates and the broader region.
Read more »
US Demands EU Transit Visas for Uzbeks, Tajiks in Security PushThe Biden administration has warned the European Union and several member states to crack down on travelers from some Central Asian nations, according to people familiar with the request, part of a broader effort to prevent possible terrorists from slipping into the US.
Read more »
Biden’s Carriers and Troops Send a Signal of Force If Diplomacy FailsPresident Joe Biden has spent the last week in frenzied diplomacy to prevent the Israel-Hamas war from spiraling into a broader conflict. But if those efforts fail, the US response may depend on the blunt force of its military.
Read more »