Higher fares give airlines a boost

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Higher fares give airlines a boost – Oct. 11, 2017

Hundreds stranded at Puerto Rican airport

What’s good news for airlines is bad news for passengers: Ticket prices are going up.

Delta Air Lines (DAL) reported better than expected third quarter earnings, even though it took a $120 million hit to profits from the brutal hurricane season. Even better, a key measure of fares climbed 2% in the quarter. And the airline said it expects airfares to increase further in the final three months of the year.

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Related: Hurricanes will cost Southwest $100 million in revenue

The report comes the day after American Airlines (AAL), the nation’s largest airline, issued improved forecast for the third quarter despite the fact it took a $75 million hit from the hurricanes. The company said that it expects that measure of fares to increase between 0.5% to 1.5% in the quarter, about a half-percentage point better than its earlier guidance.

And guidance from United Continental (UAL) said its fares fell 3.5% to 4%. But that was an improvement from its earlier guidance which warned fares could fall as much as 5%.

Related: Delta flights to offer free in-flight texting

Airlines are benefiting by strong passenger demand for seats. Delta filled nearly 87% of its seats with paying passengers in the third quarter, up 1.5 percentage points from a year earlier.

Airline stocks rose Tuesday after the guidance from American and United, but slipped in early trading Wednesday following Delta’s report.

CNNMoney (New York) First published October 11, 2017: 11:13 AM ET

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