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Home›Willingness To Pay›Airlines are expecting a travel boom. Can they keep up?

Airlines are expecting a travel boom. Can they keep up?

By Lisa Small
April 21, 2022
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In total, American has increased its workforce by 12,000 employees, or 10%, since last summer. Delta said last week it had added about 15,000 workers since the start of last year. United have hired 6,000 this year.

But by February, none of the major carriers had returned to pre-pandemic employment levels, according to federal data. Industry-wide, airlines employed more than 739,000 part-time or full-time workers in February, down about 2% from the same month in 2020. And airlines may struggle to recruit more.

“It’s a competitive market there,” said Peter McNally, vice president who oversees industries, materials and energy research at Third Bridge, a consulting firm. “Airlines are forced to compete in the wider economy.”

Airlines also face other challenges, including rising fuel prices.

American expects fuel prices in the second quarter to be about 30% higher than in the first, while United and Delta said prices could rise by up to 20%. Last week, the price of jet fuel in North America was 20% higher than a month earlier and 141% higher than a year ago, according to the Platts Jet Fuel Price Index.

Despite the challenges, the industry remains broadly optimistic, largely because skyrocketing fares don’t appear to have dampened the appetite for travel.

For the second quarter of this year, American expects revenue to be about 6-8% higher than the same quarter of 2019, although it expects capacity to be down by 6 to 8% compared to the 2019 quarter.

Airlines say customers aren’t just willing to pay higher fares – many are also shelling out even more money for premium upgrades like seats with more legroom.

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