Why airlines are optimistic about 2025
This year just got started, but it is already shaping up nicely for U.S. airlines. After several setbacks, the industry ended 2024 in a fairly strong position because of healthy demand for tickets and the ability of several airlines to control costs and raise fares, experts said. Barring any big problems, airlines — especially the largest ones — should enjoy a great year, analysts said. “I think it’s going to be pretty blue skies,” said Tom Fitzgerald, an airline industry analyst for the investment bank TD Cowen. In recent weeks, many major airlines upgraded forecasts for the all-important last three months of the year. And on Friday, Delta Air Lines said it collected more than $15.5b in revenue in the fourth quarter of 2024, a record. “As we move into 2025, we expect strong demand for travel to continue,” Delta’s CE, Ed Bastian, said in a statement. That put the airline on track to “deliver the best financial year in Delta’s 100-year history,” he said. The airline also beat analysts’ profit estimates and said it expected earnings per share, a measure of profitability, to rise more than 10% this year. Delta’s upbeat report offers a preview of what are expected to be similarly rosy updates from other carriers that will report earnings in the next few weeks. That should come as welcome news to an industry that has been stifled by various challenges even as demand for travel has rocketed back after the pandemic. “For the last five years, it’s felt like every bird in the sky was a black swan,” said Ravi Shanker, an analyst focused on airlines at Morgan Stanley. “But it appears that this industry does have its ducks in a row.” That is, of course, if everything goes according to plan, which it rarely does. Geopolitics, terrorist attacks, air safety problems and, perhaps most important, an economic downturn could tank demand for travel. Rising costs, particularly for jet fuel, could erode profits. Or the industry could face problems like a supply chain disruption that limits availability of new planes or makes it harder to repair older ones.<br/>
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Why airlines are optimistic about 2025
This year just got started, but it is already shaping up nicely for U.S. airlines. After several setbacks, the industry ended 2024 in a fairly strong position because of healthy demand for tickets and the ability of several airlines to control costs and raise fares, experts said. Barring any big problems, airlines — especially the largest ones — should enjoy a great year, analysts said. “I think it’s going to be pretty blue skies,” said Tom Fitzgerald, an airline industry analyst for the investment bank TD Cowen. In recent weeks, many major airlines upgraded forecasts for the all-important last three months of the year. And on Friday, Delta Air Lines said it collected more than $15.5b in revenue in the fourth quarter of 2024, a record. “As we move into 2025, we expect strong demand for travel to continue,” Delta’s CE, Ed Bastian, said in a statement. That put the airline on track to “deliver the best financial year in Delta’s 100-year history,” he said. The airline also beat analysts’ profit estimates and said it expected earnings per share, a measure of profitability, to rise more than 10% this year. Delta’s upbeat report offers a preview of what are expected to be similarly rosy updates from other carriers that will report earnings in the next few weeks. That should come as welcome news to an industry that has been stifled by various challenges even as demand for travel has rocketed back after the pandemic. “For the last five years, it’s felt like every bird in the sky was a black swan,” said Ravi Shanker, an analyst focused on airlines at Morgan Stanley. “But it appears that this industry does have its ducks in a row.” That is, of course, if everything goes according to plan, which it rarely does. Geopolitics, terrorist attacks, air safety problems and, perhaps most important, an economic downturn could tank demand for travel. Rising costs, particularly for jet fuel, could erode profits. Or the industry could face problems like a supply chain disruption that limits availability of new planes or makes it harder to repair older ones.<br/>
