Airline Executives Warn About Capacity Decreases and Fares Increasing

Last week, United, American, and Southwest warned analysts that fuel prices continue to rise. Executives warned that potential outcomes include higher fares and supplements (baggage, seat selection, etc.) and reduced capacity. Fuel Prices are up 80%, and airlines are struggling to meet profitability. To cut costs, airlines have focused on eliminating transcontinental routes. (Ex: LA to Pittsburgh, Cincinnati). In addition, fares are up 25% year over year. Expect this to continue until fuel prices drop, given tensions with Iran and the Strait of Hormuz being closed.