A bird flies by within the foreground as a Southwest Airlines jet is available in for a landing at McCarran International Airport on May 25, 2020 in Las Vegas, Nevada.
Ethan Miller | Getty Images
Major U.S. airlines warned a few spike in jet fuel prices, adding to costs throughout the busy summer travel season.
Jet fuel in Chicago, Houston, Los Angeles and Latest York averaged $3.18 a gallon on Tuesday after the Labor Day holiday weekend, up greater than 30% compared with July 5, in accordance with industry group Airlines for America.
Fuel and labor are airlines’ biggest costs. A spike raises questions on how much of the increase carriers have been capable of pass along to customers this summer after fares fell from last yr.
The upper cost forecasts come as Southwest Airlines narrowed its unit revenue outlook for the present quarter. The Dallas-based carrier said it expected unit revenue to fall 5% to 7% from last yr within the three months ending Sept. 30. In July, Southwest said revenue could drop as little as 3% this quarter from last yr.
“While August 2023 close-in leisure bookings were on the lower-end of the Company’s expectations, modestly impacted by seasonal trends, overall leisure demand and yields proceed to stay healthy,” the carrier said in a securities filing.
Southwest said that it expects fuel to average $2.70 to $2.80 a gallon this quarter, up from its earlier estimate of up $2.55 to $2.65. It maintained its forecast for capability to rise 12% from 2022.
Other carriers warned increased costs could affect their results.
Alaska Airlines said higher fuel prices will eat into its pretax margin this quarter.
United Airlines maintained its revenue forecast, but said it expects fuel prices of as much as $3.05 for the quarter, up from its July estimate of not more than $2.80 a gallon.
Airlines are scheduled to report quarterly leads to October.
