Airlines struggle to balance earnings
Several US airlines have revised their earnings projections for Q3 2023, citing decreased airfares nationwide
American Airlines, Southwest Airlines, and Alaska Airlines are among the domestic carriers to have dampened their revenue expectations for Q3 in recent financial reports, despite strong demand for air travel as the industry recovers from the effects of the pandemic.
Key takeaways
- A commonly cited reason for the lowered expectations is the significantly lower airfares compared to previous months and years;
- With schedules returning to normal levels and demand surging, the market has higher competition, leading to a drop in average airfares;
- Average domestic airfares are currently around 11% lower than this time last year despite increased capacity, causing several airlines to adjust their revenue forecasts.
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