In the third-quarter results of 4 major U.S. airlines, surging fuel costs led to downward revisions to earnings outlooks, highlighting that higher costs exceeded revenue growth at 3 airlines other than Southwest.
In the third-quarter results of the 3 major U.S. airlines American Airlines, Delta Air Lines and United Airlines, cost per available seat mile (CASM) exceeded revenue per available seat mile (RASM), with surging fuel costs weighing on earnings. Southwest Airlines, meanwhile, maintained revenue and increased earnings despite higher fuel costs by renewing its business model and using ancillary fees.
Against the backdrop of higher fuel costs, all 4 airlines lowered their full-year earnings outlooks. Jet fuel prices have risen to approximately $4.74 per gallon since the conflict involving Iran began, an increase of about 90%. The Dow Jones U.S. Airlines Index has fallen approximately 10% in 1 month. United Airlines' CEO suggested that 6 of the 10 airlines could post losses this year.