The Iran war has made flights cost more, and fares may stay high. Oil got more costly as the Middle East grew tense. Yet even cheaper fuel may not mean cheap seats.
U.S. data shows a 22% fare hike from a year back. Hopper puts the mean Thanksgiving round trip in the U.S. at $389. That marks a 39% rise. Christmas trips cost $452 on average, up 22%.
Fuel takes up 25% to 30% of what it costs to run an airline. Only staff pay and perks cost more. Jet fuel prices nearly doubled when the U.S. and Israel hit Iran. Rates fell for a while, then went back near their first wartime peak.
American Airlines paid close to $1.9 billion more for fuel in one quarter than a year prior. For United, the extra bill was much the same. Of its added fuel costs, the firm says it got back 72%. It plans to get the rest.
Fees for airport rent and plane landings rose 9% to 14% at some firms. Pay also rose as pilots, cabin crews, and other staff signed new deals. At American, Delta Air Lines, and United, pay and perks cost 7% to 10% more over three quarters.
Scott Kirby, the United CEO, says most airlines face losses. His view is that high fares must stay or some firms may not last. Running jets costs a lot, and cheap tickets leave little room for profit.
Big spenders have not stopped buying costly seats. Delta and United earn more profit than their peers. Both give perks to loyal flyers who pay for high-end seats. Delta gets under 50% of sales from coach. Meanwhile, American says leisure flyers book close to two out of three business-class and premium seats.
John Dalton is a Miami actor who gives theater classes to seniors. His first business seat was for a Europe trip after he beat cancer. Long trips mean a pricier cabin for him, even if he cuts back on other costs. Coach is the one he dreads.
Ed Bastian, Delta's CEO, says buyers have had little issue with price hikes in the double digits. And a few spare seats do not scare American, Alaska Airlines, or United. Their sales still rose even with fewer people on flights. Andrew Nocella, United's commercial chief, likes that trade.
Robert Mann is a former airline exec who gives firms advice. He thinks bosses send fare hints to rivals and investors on calls with analysts. Rivals may shame a firm for cheap seats, in his view. With fewer U.S. carriers, each firm has less need to cut fares.
Spirit Airlines once had flights for under $100, but it shut down. More seats had hit the market as firms added flights, and the fare cuts hurt Spirit. Its exit means fewer seats for sale. Budget rivals face hard times as well.
Boeing has U.S. approval to ship the biggest 737 Max jet. United expects 19 of them, while Alaska Airlines expects 22. Southwest is set to get the smallest Max type, which has also won federal approval.
A weak economy or a stock slump may make rich flyers spend less. They may skip trips, swap business for coach, or seek lower fares. Dalton dislikes basic business fares with fewer perks. Some lack lounge access or extra checked bags. Such fees make him less loyal to a brand.
U.S. data shows a 22% fare hike from a year back. Hopper puts the mean Thanksgiving round trip in the U.S. at $389. That marks a 39% rise. Christmas trips cost $452 on average, up 22%.
Fuel takes up 25% to 30% of what it costs to run an airline. Only staff pay and perks cost more. Jet fuel prices nearly doubled when the U.S. and Israel hit Iran. Rates fell for a while, then went back near their first wartime peak.
American Airlines paid close to $1.9 billion more for fuel in one quarter than a year prior. For United, the extra bill was much the same. Of its added fuel costs, the firm says it got back 72%. It plans to get the rest.
Fees for airport rent and plane landings rose 9% to 14% at some firms. Pay also rose as pilots, cabin crews, and other staff signed new deals. At American, Delta Air Lines, and United, pay and perks cost 7% to 10% more over three quarters.
Scott Kirby, the United CEO, says most airlines face losses. His view is that high fares must stay or some firms may not last. Running jets costs a lot, and cheap tickets leave little room for profit.
Big spenders have not stopped buying costly seats. Delta and United earn more profit than their peers. Both give perks to loyal flyers who pay for high-end seats. Delta gets under 50% of sales from coach. Meanwhile, American says leisure flyers book close to two out of three business-class and premium seats.
John Dalton is a Miami actor who gives theater classes to seniors. His first business seat was for a Europe trip after he beat cancer. Long trips mean a pricier cabin for him, even if he cuts back on other costs. Coach is the one he dreads.
Ed Bastian, Delta's CEO, says buyers have had little issue with price hikes in the double digits. And a few spare seats do not scare American, Alaska Airlines, or United. Their sales still rose even with fewer people on flights. Andrew Nocella, United's commercial chief, likes that trade.
Robert Mann is a former airline exec who gives firms advice. He thinks bosses send fare hints to rivals and investors on calls with analysts. Rivals may shame a firm for cheap seats, in his view. With fewer U.S. carriers, each firm has less need to cut fares.
Spirit Airlines once had flights for under $100, but it shut down. More seats had hit the market as firms added flights, and the fare cuts hurt Spirit. Its exit means fewer seats for sale. Budget rivals face hard times as well.
Boeing has U.S. approval to ship the biggest 737 Max jet. United expects 19 of them, while Alaska Airlines expects 22. Southwest is set to get the smallest Max type, which has also won federal approval.
A weak economy or a stock slump may make rich flyers spend less. They may skip trips, swap business for coach, or seek lower fares. Dalton dislikes basic business fares with fewer perks. Some lack lounge access or extra checked bags. Such fees make him less loyal to a brand.
