US Airlines Forecast Return to Profitability

Several major airlines in the United States announced revenue is expected to surpass pre-pandemic levels as travel demand continues to surge.

According to Reuters.com, Alaska Air Group Inc., American Airlines Group and United Airlines revealed that positive projections should lead to the companies being profitable in the quarter through June.

Officials representing the carriers said during a series of investor calls that while the surge in bookings is largely driven by leisure travelers, office re-openings and travel restrictions being lifted helped improve the industry’s outlook.

Demand may be booming, but airlines have been contending with soaring fuel costs, which have more than doubled in the past year. The companies are passing off the cost to customers, with fares climbing more than 50 percent year-on-year.

One issue still plaguing the airline industry is capacity constraints, as demand is outpacing supply due to staffing shortages and delays in aircraft deliveries. As a result, some experts fear that rising fares and surging inflation could dent travel spending.

Earlier this week, American Airlines reported its first-quarter results, revealing revenue of $8.9 billion or 84 percent of comparable period revenue in the pre-pandemic year of 2019. The carrier produced record sales in March, which was the first month since the onset of the pandemic that total revenue exceeded 2019 levels.

Last week, Delta Air Lines also forecasted a return to quarterly profit, citing “historic” high bookings. CFRA Research vice president Colin Scarola told Reuters. “a pent-up demand wave for air travel is unraveling the long-term doom-and-gloom sentiment around major airlines.”