Airlines thrive while people continue to travel

Summer travel is off to a rocky start, with few signs of slowing down on the horizon. And airline executives say they are doing everything they can to keep up, including battling bad weather and congestion in the skies and on the ground.

Three of the nation’s largest airlines — American Airlines, Delta Air Lines and United Airlines — set quarterly revenue records in the three months ending in June. Earnings have more than doubled compared to the same period last year, and the three companies have raised their expectations for how much they will earn this year.

“We’re still in a world where demand is very strong,” US chief commercial officer Vasu Raja told reporters and investors on a conference call Thursday.

The strong quarterly results underline the solidity of the travel industry’s recovery from the pandemic. June was a bit busier than the same month in 2019, and July seems to be on track to match pandemic traffic. The Transportation Security Administration screened nearly 2.9 million people on the Friday before the Fourth of July weekend Most of it was handled in one day.

But the latest recovery has been marred by problems, including delays and cancellations across the country.

Airlines and air traffic control have struggled to navigate bad weather, technology problems, staff shortages and other disruptions over the past two years, contributing to major crashes like the one Southwest Airlines suffered over several days in late December. Delays and cancellations have often followed themselves, disrupting air travel for days, leaving many people stranded far from their destinations.

Weather has been responsible for nearly 70 percent of flight delays so far this year, compared to less than 61 percent during the same period last year, According to federal data. Heavy traffic also contributed to delays.

United has recently struggled to weather disruption ahead of July 4, which it initially blamed on bad weather and an air traffic control staff shortage affecting its hub at Newark Liberty International Airport, but other airlines in the area haven’t struggled as much. In the week leading up to the holiday weekend, the airline canceled about 17 percent of all its flights and delayed more than 51 percent, according to FlightAware, a company that provides flight data.

Overall, about 1.8 percent of planned flights were canceled in the two months ending Tuesday, compared to 1.9 percent during the same period in 2019, according to FlightAware data. But an even larger number lagged: about 25 percent over the past two months, from about 19 percent in the same period in 2019.

Airlines say they have taken steps to prevent disruptions, including spending on technology, staffing and training. After their recent struggles, United said they would fly less during peak times, use more gates and make other changes.

“Now more than ever we are doing to mitigate the impact of weather, congestion and other infrastructure limitations in Newark,” said United CEO Scott Kirby.

While domestic travel has been strong for some time, airlines say more Americans are traveling abroad.

American said passenger revenue from international travel rose nearly 22 percent from the same quarter a year ago, while Delta said it set a record for international revenue in the second quarter. United said this week it would add more flights to Asia in October.

Driven by higher demand, an international round-trip flight costs an average of about $971, up about 24 percent from fares at this time in 2019, according to travel app Hopper.

Those higher fares have been good for airlines, and US, Delta and United say they expect the good times to continue. For example, Delta now expects revenue to rise at least 17 percent this year compared to last year.

Ticket prices rose a year ago as airlines struggled to meet demand and Russia’s invasion of Ukraine sent jet fuel prices soaring. But fuel prices have fallen. American said it spent about a third less on fuel during the second quarter compared to last year, resulting in savings of about $1.3 billion.

As a result, the average price for a domestic round trip fell more than 13 percent, to $261, on Thursday the same day last year and more than 9 percent from 2019, according to Hooper. Prices were much lower in June than in the same month a year earlier, which contributed to lower overall inflation.

Even as fuel prices fall, labor costs go up. American said it spent about 12 percent more on salaries, wages and benefits in the second quarter than a year ago. The airline is negotiating a new contract with its pilot consortium, which is expected to include significant pay increases.

Over the weekend, the United Flyers reached agreement with the company on a $10 billion contract that would increase wages by up to 40 percent over four years, an increase the Americans said it would match. In March, the Delta pilots agreed to a contract that would increase wages by 34 percent by 2026.

United and American also negotiates contracts with the unions that represent their hostesses.