Insights

Pent-Up Demand And Smart Strategies On Capacity Are Keeping U.S. Airlines Flying High

In 2017, airline industry labor costs rose as new contracts were signed. Oil and fuel prices edged up. No matter: Pent-up demand for air travel and restraint in adding capacity are keeping U.S. airlines — both network and value carriers — in the black.

Through the second quarter of 2017, the airlines had enjoyed 17 straight quarters of profitability. That year, not only was operating revenue up — to a combined $2.4 billion — but for the first time in a while, combined passenger yield (the measure of the average fare paid per mile, per passenger) was rising as well, according to the latest Oliver Wyman Airline Economic Analysis.

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