April 27. U.S. carriers expect strong profit in the current quarter as travel spending remains strong, but delays in aircraft deliveries and staffing shortages are hampering their efforts to fully capitalize on consumer demand.
Several U.S. operators including American Airlines (AAL.O) and Southwest Airlines (LUV.N) noted that delays in Boeing’s (BA.N) aircraft deliveries could hurt in coming months. Travel has remained robust even as rising inflation is making leisure activities more expensive.
American Airlines, which forecast a higher-than-expected profit for the second quarter, expects to receive 20 planes from Boeing in the remainder of this year. CEO Robert Isom said the carrier is concerned about potential delays impacting its summer schedule.
Southwest Airlines on Thursday trimmed its capacity growth plans, citing Boeing’s aircraft delivery delays. It now expects 70 deliveries of the 737-8 jet this year instead of the planned 90 after the U.S. planemaker disclosed a manufacturing issue with some of the workhorse aircraft.
Rising interest rates, high inflation, mounting job losses and turmoil in the banking industry have fueled concern about the strength of consumer spending, which has allowed carriers to mitigate higher labor and fuel costs.
Source: Reuters
