U.S. Airlines See Higher Labor Day Travel Demand Than in 2015
August 17 2016 - 8:20AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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