High demand from both business and leisure travellers is likely to push average U.S. airline ticket prices higher in the coming months, the Chicago Tribune reported October 26, 2017.
Both American Airlines and Southwest Airlines told investors that they anticipate an increase in revenue per seat per mile flown — an industry financial metric based on average fares and how many seats are filled on aircraft — through the end of 2017. Southwest told investment analysts that revenue per mile is expected to rise 1.5 per cent in the fourth quarter of 2017, while American Airlines predicted a rise of 2.5 to 4.5 per cent.
If those predictions hold, it could signal a shift away from the fare wars that have helped keep airline ticket prices low and negatively affected airline stock prices.
Both airlines posted solid earnings in the third quarter of 2017 despite taking financial hits due to flight cancellations related to hurricanes Harvey, Irma, and Maria.
“Despite all these challenges, it was a very strong quarter, and fourth quarter looks better,” Southwest Chairman and CEO Gary Kelly said.