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Airline fortunes rise with supply/demand imbalance: column

Mount Equity Group Tokyo Japan > News > Business > Airline fortunes rise with supply/demand imbalance: column

These conditions hobble carriers as they try to absorb a surge of pent-up demand from travelers eager to hit the road after two years of COVID-19 restrictions. Total passenger volumes in the U.S. rose nearly 40% in the 12 months ended in October, according to the latest data available from the Bureau of Transportation Statistics.

Widespread cancellations during the summer and holiday travel seasons showed airlines couldn’t handle so much demand. Which isn’t to say it was bad for business.

In fact, airline economics have flipped from atrocious two years ago to nearly ideal today. Demand for airline seats exceeds the supply, giving carriers power to raise fares. So that’s what they’re doing, to the tune of a 22% rise in average airfares in October. Rising fares are driving revenues and profits past pre-COVID levels at major carriers like Delta, American and Chicago-based United. 

Thanks to the supply/demand imbalance,…

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