Summer Flight Forecast: Pay More, Enjoy It Less
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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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