"Full Flights but Fewer Planes? Why Year-End U.S.-Bound Tickets Are Disappearing"

Fuel Cost Burden Grows Despite Higher Airfares

United Cancels Some December Flights

Major U.S. airlines are scaling back their year-end flight schedules in response to a surge in fuel costs.

According to foreign media reports on the 17th (local time), executives from American Airlines, United Airlines, and Southwest Airlines stated the previous day that they are reducing their scheduled flights as recent increases in fuel prices threaten profitability.

United Airlines passenger aircraft. Photo by AP Associated Press

The U.S. airline industry has absorbed rising fuel costs since the outbreak of the Iran war by adjusting flight capacity, leveraging strong travel demand, and raising airfares.

The executives of the three airlines explained that even after raising fares, strong demand has helped offset much of the increase in jet fuel costs. However, with another sharp rise in fuel prices recently, they are reviewing the operation of less profitable routes toward the end of this year. These adjustments could continue into next year.

American Airlines has projected that the recent increase in fuel prices alone will raise its fourth-quarter expenses by about 1 billion dollars (approximately 1.8 trillion KRW). United Airlines announced that it will cancel certain December flights on some routes that have become less profitable due to higher fuel costs and stated that further adjustments could be made after the first quarter of next year.

Southwest Airlines reduced its planned expansion in flight capacity for the year to about half of what was originally planned due to increased fuel expenses. The company also indicated that if fuel prices remain high, it may further cut its routes.

Even amid robust travel demand, the spike in fuel costs is impacting airlines’ operational plans. Airlines are maintaining fare levels on routes backed by strong demand, but reducing the number of flights on routes where rising costs have eroded profitability.

Michael Leskinen, Chief Financial Officer of United Airlines, explained at a Morgan Stanley conference that bookings for the fourth quarter remain very strong, with almost no signs of a decline in demand. He added that premium seat demand continues to be strong, business travel demand is improving, and demand for economy seats is also holding steady.

Tom Doxey, CFO of Southwest Airlines, said that stronger-than-expected autumn sales are helping to offset the burden of higher fuel costs. As a result, the company is able to maintain its profit outlook for the third quarter.

This content was produced with the assistance of AI translation services.