How’s the airline industry doing this summer?
Based on just-released results for June from American and Southwest: Very well, thanks.
American, whose results included US Airways’ operations as well, reported a 1 percent increase in traffic from June 2013, and expects 2nd-quarter revenue-per-seat to be around 6 percent higher than last year’s.
Due to increased capacity, June load factor (the percentage of seats occupied) was down slightly, from 86.9 percent last year to 85.0 percent.
For Southwest, June traffic was up 2.2 percent year-over-year, and load factor increased from 85.0 percent to 86.1 percent.
Passenger revenue for June is estimated to have increased between 7 and 8 percent over the previous year, with revenue for the full 2nd quarter increasing more than 8 percent.
The strong operational and financial performance by two of the largest U.S. airlines reflects a combination of solid demand on the part of travel consumers and the airline industry’s newfound discipline in restraining growth. The result, predictably: full planes, and higher airfares.
That’s a recipe for good times for the airlines, and their shareholders. (American’s stock price increased 3.4 percent on today’s news; Southwest’s was up 1.4 percent.)
For travelers, on the other hand, the airlines’ good fortunes are a decided negative. Who wants to pay more to fly on a more crowded plane?
Reader Reality Check
Paying more for air travel, and enjoying it less?
This article originally appeared on FrequentFlier.com.
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