Could the major U.S. airlines swing to a profit in the holiday quarter?
- CNBC's Phil LeBeau says the big four U.S. airlines might remain in loss in Q4.
- He blames the surge in jet fuel prices for a delay in airlines' return to profitability.
- Passenger levels were down 19% from 2019 equivalent in the first half of November.
The holiday season is upon us, and historically, it’s when travel and tourism is at its peak. But CNBC’s Phil LeBeau says it wouldn’t be surprising if the major airlines still remained in loss in Q4.
LeBeau’s remarks on CNBC’s ‘Squawk Box’
On “Squawk Box”, LeBeau said the surge in jet fuel prices could delay the sustainable return of the big four U.S. airlines to profitability.
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The Gulf Coast Jet Fuel is up 70% compared to a year ago, and that’ll be hard for any airline to make up for, even if they have raised airfares. So, don’t be surprised if the big four U.S. airlines don’t report a profit for Q4.
He, however, confirmed that it might not be a “huge loss”. On the flip side, the airlines are on a hiring spree as they ramped up their schedules for the holiday season. The cost per available seat mile (CASM), LeBeau added, has also come up “dramatically”.
Number of people screened could top 2019 figure today
LeBeau expects the Transportation Security Administration (TSA) to screen more people today than it did a day before Thanksgiving in 2019. He added:
The best news is, when you look at the flights board, no cancellations. Great weather across the country. That’s exactly what the airlines needed – a clean start to the holiday travel season.
The TSA has screened over 2.0 million people over the past five days straight, and the CNBC reporter expects that number to climb further to near 2.4 million today. Passenger levels, he added, have been improving month after month, with it down 21% on a year-over-two-year basis in October and 19% in the first half of November.