Airlines Expect Booming Travel Ahead. Can They Keep Up?

In all, American has expanded its work power by 12,000 workers, or 10 p.c, since final summer season. Delta mentioned final week that it had added about 15,000 employees because the begin of final yr. United has employed 6,000 this yr.

However as of February, not one of the main carriers had returned to prepandemic employment ranges, in accordance with federal knowledge. Industrywide, airways employed greater than 739,000 part-time or full-time employees in February, down about 2 p.c from the identical month in 2020. And airways could battle to employees up additional.

“It’s a aggressive market on the market,” mentioned Peter McNally, a vp who oversees analysis on the industrials, supplies and vitality industries at Third Bridge, a consulting agency. “The airways are pressured to compete in a broader financial system.”

Airways face different challenges, too, together with rising gasoline costs.

American expects gasoline costs within the second quarter to be about 30 p.c increased than within the first, whereas United and Delta have mentioned costs may rise as a lot as 20 p.c. Final week, the value of jet gasoline in North America was 20 p.c increased than it was a month earlier and up 141 p.c from a yr in the past, according to the Platts Jet Fuel Price Index.

Regardless of the challenges, the trade stays broadly optimistic, largely as a result of skyrocketing fares don’t appear to have curbed the urge for food for journey.

For the second quarter of this yr, American expects income to be about 6 to eight p.c increased than in the identical quarter of 2019 — regardless that it expects capability to be down 6 to eight p.c from the 2019 quarter.

Airways say clients aren’t simply keen to pay increased fares — many are additionally shelling out much more cash for premium upgrades like seats with extra legroom.

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