Air ticket price rise boosts airlines' profit outlook

Airlines are flexing their pricing power as limited capacity and strong consumer demand have eased pressure to discount fares to fill their planes.<br/>The rising fares have bolstered the outlook for carriers on both sides of the Atlantic. Major U.S. airlines including Delta, Alaska and United have forecast bumper profits this year. Earnings at most European airlines are expected to improve as well. Airfares in the United States rose at their fastest pace in 21 months in December from a year ago, data from the Department of Labor shows. In Europe, airline ticket prices were up 6% year-on-year in 2024, according to data from travel research group ForwardKeys. Global airlines body IATA has forecast about a 15% year-on-year jump in net profit per passenger for North American airlines in 2025. European carriers are estimated to reap a 12% annual increase in net profit per passenger. Rising fares are a reflection of enforced capacity discipline as a shortage of planes due to production and engine delays has put a cap on the industry's growth plans. Aircraft deliveries from Boeing and Airbus have been slow due to supply-chain challenges. And ongoing inspections of RTX's Pratt & Whitney GTF (geared turbofan) engines have forced airlines to ground a number of jets.<br/>