U.S. Airlines See Higher Labor Day Travel Demand Than in 2015

The major U.S. airlines expect 15.6 million passengers to fly over the seven-day Labor Day travel period, up 4% from the analogous period a year ago, according to Airlines for America, the leading industry trade group.

During this year's travel period, which runs from Aug. 31 through Sept. 6, about 2.23 million passengers a day on average will take to the skies, up about 82,000 a day from last year. The busiest days are expected to be Sept. 2 and Sept. 1, respectively. Airlines for America said the carriers are expected to increase their number of seats available by 4% to accommodate the increase in demand.

Fares were down 5.2% in 2015 and are down 6% so far in 2016, the trade group said, which makes air travel a relative bargain and is helping fuel the expected surge in Labor Day travel this year.

In the first half of 2016, 10 leading U.S. airlines collectively reported pretax profit of $12 billion, up from $11.3 billion a year earlier. That translated into a profit margin of 15.5%, or 15 and a half cents on each dollar of revenue. The improvement came on a 1.9% drop in expenses, with falling fuel prices making up for increases in aircraft, airport costs and labor. Employee wages and benefits alone have risen 35% since 2010, to $3.44 billion a month from $2.55 billion a month, the trade group said.

Through June of this year, the 10 carriers collectively spent $9 billion on improving the customer experience, primarily through the acquisition of new planes. For all of 2016, they are expected to take delivery of 366 new aircraft. Other investments include larger overhead bins, seats that convert into lie-flat beds in some premium cabins, USB outlets, expanded Wi-Fi and in-flight entertainment systems, along with improved check-in and gate areas and baggage systems.

In the first half of this year, U.S. airlines completed 98.75% of their scheduled flights, up from 97.83% a year earlier. They arrived within 15 minutes of schedule 82% of the time, up from 77.7% a year earlier.

Airlines for America has nine members, three cargo carriers and American Airlines Group Inc., United Continental Holdings Inc., Southwest Airlines Co., JetBlue Airways Corp., Alaska Air Group Inc. and Hawaiian Holdings Inc. Delta Air Lines Inc., the No. 2 U.S. airline by traffic, quit the group last fall so it could go its own way on Washington issues, saving $5 million in annual dues.

Write to Susan Carey at susan.carey@wsj.com

(END) Dow Jones Newswires

August 17, 2016 08:05 ET (12:05 GMT)

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