One of the big questions going into second-quarter earnings is how much can airlines hold onto their pricing gains.
Airfares are up around 20% on average and last quarter, those increases led most major U.S. airlines to report record revenues.
Now, even as fuel prices come down, airlines are hoping those higher prices stick.
Travel demand is still high. United CEO Scott Kirby has even said he expected to see more of elasticity in demand, but that has not happened so far. Delta CEO Ed Bastian said in April he thinks the high spend travelers are essentially “immune” to the headlines.
Plus, the industry is benefitting from less capacity in the domestic market following Spirit Airlines’ collapse. Domestic seats are down around 2%, according to aviation intelligence firm IBA. Less capacity and a resilient consumer mean that those airfare increases may be here to stay.
The average Caribbean island connects to roughly 14 inbound source markets. Every new market added is a hedge against demand shocks.
EDITOR’S PICKS
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Those Higher Airfares May Stick Even if Fuel Prices Drop
by Meghna Maharishi
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Airlines are betting that they can hold onto their pricing power even as the price of fuel decreases due to strong demand and fewer competitors in the industry.
Air New Zealand’s Tech-Savvy CEO on AI and the Limits of the Machine
by Gordon Smith
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An AI-powered airline is a fine ambition – but it won't touch the fuel price, the grounded engines, or the weak Kiwi dollar doing the real damage. Ravishankar's edge is that he seems to know it.
UK and Australia Lift Gulf Travel Warnings, But European Airlines Await Clearance
by Deepthi Nair
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Gulf travel advisories are moving. War-risk insurance authorization isn’t — and that’s the constraint that controls when European airlines come back.
JetBlue Pushes Deeper Into Fort Lauderdale, Shrinks in Newark and LaGuardia
by Meghna Maharishi
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JetBlue is shrinking in the New York area as it focuses more on Fort Lauderdale, where executives see greater opportunity following Spirit’s collapse.
SKIFT PODCAST NETWORK
Is Las Vegas out of luck? Well, its air traffic is down 6%. On this week’s Airline Weekly Lounge, Gordon and Jay work through what's behind it, then turn to a U.S. market headed firmly the other way.
