Airlines are gearing up for a busier — and costlier — holiday season as fuel prices rise

Demand for air travel is on the rise ahead of the holidays. So are the costs. Jet fuel hasn’t been this expensive since 2014. Airlines also racing to hire thousands of employees to meet growing demand: pilots, flight attendants, reservations agents, baggage handlers and many others, competing in a tight labor market that would have seemed impossible in the early days of the coronavirus pandemic. And, airlines have run through much of the $54b in government payroll aid that helped cover their labor bills during the crisis. The rise in costs is threatening the industry’s attempt to return to profitability after losing a record $35b last year when the pandemic snapped a decade of profits. For passengers, the combination of returning demand and higher costs could mean more expensive ticket prices ahead. Delta last month said higher jet fuel prices would weigh on its bottom line in the fourth quarter. Frontier Airlines on Wednesday forecast a loss on an adjusted basis for the fourth quarter due to higher fuel costs. Benchmark US jet fuel was $2.27 a gallon on Nov. 10, up 25% from three months earlier. The rise in fuel prices is “definitely delaying the earnings recovery,” said Savanthi Syth, an airline analyst at Raymond James. “If it’s a slow burn, airlines can handle it. This move up in this short of a period is not good.” Airlines eager to cash in on a return to demand have tried to balance — with varying degrees of success — how much they can fly with their current staffing levels. Overall, US carriers will fly about 6% less in November and December compared with 2019, before the pandemic, according to aviation data and consulting firm Cirium. Low-cost airlines like Frontier and Spirit are exceptions, with more capacity scheduled than they did two years ago.<br/>