U.S. Airline Industry Optimistic About Profitable Summer Season

Published Date : Jun 10, 2014

The American airline industry is gearing up for a strong summer travel season this with airline operators Southwest Airlines and American Airlines Group Inc. projecting a strong travel season ahead. Summer is usually a key period for the airlines industry when vacationers pack planes to their fullest. According to American, revenue for the second quarter for every seat flown a mile (indicator of fare and traffic) will surpass its last month’s projections. Southwest CEO Gary Kelly, in an address to employees on Monday, said that he expects seasonal travel to be ‘great.’

With air travel picking up, experts anticipate that the industry would rebound at a time when airlines are looking for better pricing power. Typically, summer marks the busiest time for airlines in the United States, with July being the peak, and the months of June and August coming a close second, according to Bloomberg data. 

A survey conducted by Airfarewatchdog that included 13,000 travelers noted that nearly 77% people had plans of flying during the summer season, as compared to 15% who will likely drive. The domestic market in the United States’ airlines industry continues to be the key driver of strong demand. This is also expected to push prices higher over the summer season, according to Helane Becker, an analyst at Cowen & Co. The U.S.’s third-largest carrier - Delta Air Lines Inc - reported earlier in June that the industry fares and traffic benchmark Prasm had spiked 7% in May 2014. This was a result of the load factor (average seats per flight that are filled) touched 86.5% after a 1.7 points rise.