.jpg)
1 hour ago
3
Article content
“The longer this lasts, the higher the probability goes that the pricing increases hold,” Kirby said.
Article content
And once the rush of summer travel subsides, carriers will probably take another hard look at capacity and weed out more routes that have become unprofitable.
Article content
Chicago-based United said it expects it can recapture as much as 100% of the higher fuel costs by the end of the year by increasing prices for customers.
Article content
Delta Air Lines Inc. CEO Ed Bastian said in a recent earnings call that the company would look at the degree to which it could “retain any of the pricing strength” even after fuel costs come down.
Article content
The saving grace for the moment is that bookings remain strong with peak summer travel season arriving — though cracks are showing. United said current demand is resilient, but that likely won’t hold as more expensive tickets discourage flying.
Article content
Like American Airlines a few days later, the carrier slashed its full-year profit forecast.
Article content
American CEO Robert Isom said demand remains robust for now and he expects double-digit revenue growth in the current quarter, even as the carrier trims marginal flying.
Article content
Article content
Still, the company lowered its annual forecast and said it may end the year with a loss.
Article content
That U-turn comes as American and Alaska Air pursue potential revenue-sharing agreements and other strategic partnerships, Bloomberg News reported.
Article content
American also has been the subject of speculation about a potential merger with United. Kirby floated the idea during a February meeting with Trump, people familiar with the matter have said.
Article content
American and the usually business-friendly president swatted back the idea, saying it would reduce competition. Days later, Trump threw airline bosses another curveball, saying he’s weighing a government purchase of Spirit rather than letting it go under.
Article content
“The current administration doesn’t make long-term planning easy, and airline CEOs are being forced to think on their feet,” said Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations.
Article content
That includes C-suites around the world. There have been signs that Asian countries are hoarding jet fuel, and the International Energy Agency warned that Europe may deplete its supplies in weeks.
Article content
Article content
Deutsche Lufthansa AG, Europe’s largest airline group, is cutting about 20,000 flights from its summer schedule and adopting the pricing models of budget airlines by selling tickets that don’t include bags.
Article content
As in every crisis, there’s always one person telling everyone to calm down. In aviation, that’s Emirates’ Clark, whose Dubai-based carrier has been devastated by the conflict.
Article content
The world’s largest airline is operating at 65% of capacity after a near-total grounding as travelers avoid the Persian Gulf region. But once the Strait of Hormuz reopens, it should only take one-to-two months for business to rebound, he said.
Article content
“People have short memories,” Clark told a Berlin conference Thursday. Once the fighting stops and there’s a degree of stability, “things will be back to normal.”
Article content
—With assistance from Leen Al-Rashdan.
Article content
English (US)