With travel demand above pre-pandemic levels, airlines can expect smooth flying ahead
With travel demand above pre-pandemic levels, airlines can expect smooth flying ahead
Boeing — which has been struggling to get production back on track — and JetBlue both post quarterly earnings Tuesday morning. The biggest U.S. carriers have already reported.
Airlines have been doing well, with Delta, United and American delivering strong results.
“The demand picture is healthy,” said Mike Stengel, principal at AeroDynamic Advisory.
Overall, U.S. air travel now exceeds pre-pandemic levels. The major airlines are earning more on premium seats and destinations, and airfares are up about 8% year over year.
“A lot of the revenge travel is behind us,” Stengel said. “We still see carriers getting creative, like United launching service to Greenland and Mongolia.”
The big problem is on the supply side for aircraft and labor, according to Nicolas Owens, an equity analyst at Morningstar.
“Trouble at Boeing and similar backups on Airbus planes,” he explained. “There’s also a shortage of air traffic controllers.”
That makes it hard for airlines to add new aircraft and flights. Stengel at AeroDynamic Advisory added that they’re flying older planes, driving up maintenance costs.
He predicts Boeing and Airbus won’t catch up to pre-pandemic production levels — until 2028.
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