Flights are getting dearer as airlines cut back growth plans

Airlines are reporting higher unit revenues for the tail end of summer, an indication customers will proceed to should shell out more to fly in the approaching months.

Alaska Airlines on Thursday raised its third-quarter profit forecast to a spread of $2.15 to $2.25 per share from a previous outlook of not more than $1.60 per share. It also said it expects unit revenue to rise by as much as 2% after previously estimating flat to “positive” unit revenue growth over last 12 months.

Delta Air Lines said domestic and trans-Atlantic unit revenue can be up in September from last 12 months, though it said the CrowdStrike outage in July will mean unit sales will rise not more than 1% compared with a previous forecast of as much as 4% higher for the quarter. Delta has said it expected a $500 million hit from the outage and its aftermath, when it canceled some 7,000 flights.

Alaska said it had a tail wind from the outage, which affected Delta customers greater than those on other airlines.

“While capability stays in keeping with prior expectations, revenue has performed higher than anticipated driven by additional revenue in July related to CrowdStrike disruptions across the industry and stronger performance in August and September,” Alaska said in a securities filing.

Delta’s president, Glen Hauenstein, told a Morgan Stanley conference on Thursday that Delta is not seeing a lingering impact on bookings from the outage.

Airlines had been wrestling with record numbers of travelers but lower fares and weaker-than-expected pricing power. That appears to be changing.

Wednesday’s U.S. inflation report showed an airfare price index rose 3.9% in August after five consecutive months of declines.

Frontier Airlines said Wednesday that it’d break even this quarter, on an adjusted basis, after a previous forecast of margins starting from -3% to -6%, after it moderated capability. Last week, JetBlue Airways raised its unit revenue growth forecast for the present quarter because of upper demand and a profit from the “re-accommodation of shoppers affected by other airlines’ cancellations on account of technology outages in July.”

Airlines from full-service carriers like Delta and United to budget airlines like Frontier and Spirit have been chasing higher-spending travelers with perks like more room on board.

“We’re always eager about what we will do to proceed to extend that competitive gap with premium products, from improving the food we serve on our planes to improving our loyalty program, to improving our Wi-Fi product, to improving particularly our Polaris product on international top quality,” United’s CFO Mike Leskinen said on the Morgan Stanley conference on Thursday.

U.S. airlines have also slowed if not halted hiring altogether this 12 months as aircraft arrive late from Boeing and Airbus, and demand moderates after an enormous hiring spree.