NEW YORK (Reuters) – U.S. airline profits in the first nine months of 2017 fell 20 percent year over year, but the busiest Thanksgiving travel period in more than a decade could give carriers a boost, according to an industry trade group on Wednesday.
Despite posting a collective 3.8 percent revenue increase, steep upticks in operating expenses drove down the pretax profits of nine publicly traded U.S. airlines, Airlines for America (A4A) said.
The carriers, including American Airlines, Delta Air Lines and United Airlines, posted a total profit of $14.7 billion, down from $18.4 billion in the year-ago period.
Airlines are poised to recoup at least some losses during what A4A forecasts will be the busiest year for Thanksgiving travel since at least 2005, with a 3 percent increase from 2016 to 28.5 million passengers over the 12-day period.
Thanksgiving Day, on Nov. 23, will have the fewest travelers, but the following Sunday will be the busiest day with 2.88 million passengers, it estimated.
U.S. airlines have struggled to balance raising salaries with squeezing money out of increasingly cost-sensitive customers.
Unions at the largest U.S. carriers have negotiated pay raises for pilots and flight attendants, leading to an 8.1 percent increase in labor expenses, A4A said. The cost of fuel has also risen by about 17 percent from the year-ago period.
A bitter fare war between legacy U.S. carriers and their smaller, low-cost rivals has also depressed revenue.
Reporting by Alana Wise; Editing by Richard Chang
Record Thanksgiving air travel could boost U.S. airlines – Reuters – Reuters