Flights become more expensive as airlines scale back growth plans

Airlines are reporting improved unit revenue for the end of summer, a sign that customers will continue to have to shell out more to fly in the coming months.

Alaska Airlines On Thursday, the company raised its third-quarter profit forecast to a range of $2.15 to $2.25 per share, up from a previous forecast of no more than $1.60 per share. It also said it expects unit revenue to rise as much as 2%, after previously estimating flat to “positive” unit revenue growth from a year ago.

Delta Air Lines said domestic and transatlantic unit revenues would rise in September from last year, although he said Mass coup The power outage in July will mean unit sales will rise no more than 1% compared with a previous forecast of up to 4% for the quarter. Delta has said it expected a $500 million hit from the outage and its aftermath, as it canceled about 7,000 flights.

Alaska said it faced tailwinds from the disruption, which affected Delta customers more than those of other airlines.

“While capacity remains in line with prior expectations, revenue has performed better than anticipated, driven by additional revenue in July related to CrowdStrike industry disruptions and stronger performance in August and September,” Alaska said in a securities filing.

Delta President Glen Hauenstein said Thursday at a Morgan Stanley conference that Delta is not seeing a prolonged impact on bookings due to the disruption.

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

Wednesday's U.S. inflation report showed the airfare price index rose 3.9% in August after five straight months of declines.

Frontier Airlines said on Wednesday it could break even this quarter, on an adjusted basis, after previously forecasting margins ranging from -3% to -6%, after moderating capacity. Last week, JetBlue Airlines raised its unit revenue growth forecast for the current quarter due to stronger demand and a benefit from “reaccommodation of customers affected by other airlines' cancellations due to technology outages in July.”

Full-service airlines such as Delta and United to low-cost airlines such as Frontier and Spirit have been seeking out higher-spending travelers with benefits like more space on board.

“We're constantly thinking about what we can do to continue to widen that competitive gap with premium products, from improving the food we serve on our planes to improving our loyalty program, improving our Wi-Fi product and particularly improving our Polaris product in international first class,” United Chief Financial Officer Mike Leskinen said at the Morgan Stanley conference on Thursday.

U.S. airlines have also slowed, if not stopped altogether, hiring this year as Boeing and Airbus planes arrive late and demand moderates after a massive hiring spree.