American, Delta, and Southwest Airlines all raised their revenue forecasts for Q1 thanks to increased travel demand.
Video Transcript
RACHELLE AKUFFO: All right, shifting gears now to look at airlines that rallied today after revealing a strong revenue outlook for the first quarter, and that’s amid better than expected demand. Ines Ferre is here with more. Ines, what can you tell us?
INES FERRE: Well, Rachelle, the major airline CEOs today were speaking at JP Morgan’s Industrial Conference. And basically, they said that they are seeing strong demand. You had Delta’s president Glen Hauenstein who said we’re seeing an increase in demand that is really unparalleled. So the airlines have given rosier than expected revenue for the first quarter of this year compared to the first quarter of 2019, the pre-pandemic quarter, whereby it’s basically saying that the revenue is not expected to be down as much from those levels back in 2019 because of the strong demand.
And this is across the board with Delta, Southwest, United, American. And basically, the bottom line is, is that the rise in oil prices that we saw recently won’t be impacting their recovery. A few airlines still hedge against the volatility in fuel with future contracts, but several– many of them for the most part buy fuel a couple of weeks ahead of time.
And they have said that they have been able to sort of pass along that fuel cost to the consumer, and with Delta saying that it’s increasing its ticket prices by anywhere between $15 and $20 because of those– that rise in fuel costs because of that recent rise that we saw in oil prices. But bottom line is, is that they are able to pass those on to the consumer, and they are seeing strong demand for this first quarter.
RACHELLE AKUFFO: And any mention of business travel, which was expected to be the slowest to come back?
INES FERRE: Yeah, that’s right. And it’s a lucrative sign when they do see that business travel coming back. It’s been the slowest to come back…