United Continental, JetBlue, Southwest, and Alaska Airlines are all reporting earnings today. Overall, the industry says profit margins are fragile, and they’re blaming the FAA for the latest threat.
Fewer air traffic controllers are clocked-in nationwide, because of automatic federal spending cuts. That means flight delays and a whole lot of angry customers. So far the delays are not that bad; it’s what’s coming in the next few months that airlines are worried about.
“Especially as we go into the summer peak season, this could most definitely have a negative impact on their bottom line,” says Darin Lee, an airline industry consultant at Compass Lexicon.
Lee says these days airlines are flying fewer planes, so more flights are full.
“If they’re forced to reduce number of flights out of D.C., O’Hare, LaGuardia because of controller cuts, then that does represent lost revenues for those airlines,” he explains.
The airlines say they’re trying to minimize frustration for passengers, but the industry trade group Airlines for America (A4A) says the delays are unpredictable, and unaffordable.
“This is an industry that last year, in a profitable year, our profit amounted to $0.21 a passenger, so you can see that that’s very narrow margins,” says A4A spokeswoman Jean Medina.
Airlines are asking employees and passengers to be patient with the delays, and take their complaints to Congress.
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