Record numbers of people are flying. So why are airlines' profits plunging?

Record Number of Passengers Expected During Holiday Travel Week #

Airlines are facing multiple challenges despite the expected surge in passenger numbers during the holiday travel week. The cost of fuel, wages, and interest rates is increasing, putting pressure on airlines’ finances. Additionally, the issues at Boeing have resulted in a shortage of planes, preventing airlines from expanding routes to accommodate the growing number of flyers. Strong bookings cannot fully offset these financial constraints. While passengers may not immediately feel the impact, in the long run, it could lead to fewer airline routes, limited choices for passengers, and a less pleasant flying experience. Industry experts predict a significant drop in profits for airlines in the coming months, mainly due to higher labor costs and rising jet fuel prices. The crisis at Boeing and engine problems with some Airbus planes have further exacerbated the situation. The limitations on manufacturing and grounded planes have compelled airlines to reduce fleet expansion plans and cut costs by requesting pilots to take unpaid leave and implementing hiring freezes. The competition in the industry remains fierce, with an increase in seat availability and lower fares. However, this has negatively affected airline profits while benefiting passengers. Although discount carriers are driving prices down, they may struggle to sustain themselves in the long term as the major carriers continue to face financial challenges.