American And Jet Blue One will stop selling seats on flights next Friday, two months after a federal judge ruled that the Northeast airline partnership violated antitrust laws.

The judge ordered the airlines to end their partnership of more than two years, which allowed them to share passengers and revenue, and coordinate schedules in the northeastern United States. Delta And united In busy airports serving New York and Boston.

The Department of Justice, six states, and the District of Columbia sued to block this partnership, winning their case on May 20.

““We are disappointed to end popular benefits such as codeshare and mutual loyalty benefits,” Dave Fintzen, JetBlue’s vice president of Northeast Alliance, said in a statement. With the recent court ruling and the termination of the NEA, we have to go down I say in short order.”

JetBlue said last week it would not appeal the ruling, so it could focus instead on its $3.8 billion acquisition. Spirit Airlines, a deal also challenged by the DOJ, though JetBlue said it did not agree with the judge’s ruling on the Northeast alliance. However, America said it still plans to appeal the ruling on the Northeast Alliance.

Earlier this week, airline websites still offered flight options on each other’s airlines during the year-end holidays, but those sales will only last through July 20.

Both airlines said they will work with customers who have existing reservations so that their plans are not disrupted.

“This is only the first step in the truce process that will take place over the coming months,” American said in a statement. “We will continue to work with the JetBlue team to ensure that customers with existing codeshare reservations can travel smoothly without disrupting their travel plans.”

Thursday is also the last day customers can use their American AAdvantage frequent flyer miles to book flights on JetBlue.

Flight disruptions piled up at airports across the country ahead of the Fourth of July weekend, but airline investors have largely ignored it.

More than 63,000 flights operated by US airlines, or 30% of their schedules, have been delayed between June 24 through July 2. More than 9,000 flights have been cancelled, or 4.2%. Both percentages are above the averages for turbulence so far this year, according to flight-tracking website FlightAware.

On Tuesday, disruptions eased with nearly 2,500 US flights delayed, half the number that were delayed on Monday, though thunderstorms continued to disrupt flights at major airports such as Newark and Denver.

The recent delays have been mostly driven by a series of rolling storms along with other issues such as a shortage of air traffic controllers in the crowded airspace around New York and other areas, which has derailed the travel plans of thousands of customers. An end to what was mostly a quiet spring for travellers.

But very high travel demand continues to keep airline stocks higher, With many reaching multi-year highs.

The Transportation Security Administration said it screened nearly 2.9 million people on Sunday, a record for a single day. It is the clearest sign yet of the continued demand for air travel, as passengers book flights or collect rewards points and make up for lost time after the Covid pandemic halted flights.

American Airlines And Delta Airlines It recently raised its earnings forecast thanks to strong bookings. Lower fuel prices than a year ago continue to be a tailwind for the industry, too.

The airlines publish second-quarter results and will provide full forecasts for the summer starting in mid-July, reports that are likely to include the financial impact of the late-June and early-July disruptions.

The gains in stocks of major US airlines this year have far outpaced the broader market.

United Airlines Both Delta are up 46% so far this year through Monday, while American Airlines is up 42%. For comparison, the Standard & Poor’s 500 It gained 16% over the same period. Delta and United recently touched their highest levels since June 2021.

Southwest Airlineswhose collapse at the end of 2022 led to a first-quarter loss, it’s up 10% this year.

Even during the past week, as travel chaos hit operations, several airline stocks topped the S&P 500. United Airlines was an exception. Its stock fell 1.7% as the carrier struggled to stabilize its business while storms continued to pass through its hub at Newark Liberty International Airport.

From June 24 to July 2, United had the highest number of delays for US airlines, accounting for 42% of its major airlines’ schedule, according to FlightAware.

At the beginning of last week, the FAA lowered the departure rate in Newark, CEO Scott Kirby said, leading to a backlog of delays. When planes can’t leave, arriving flights have nowhere to park, so turbulence can easily build up.

“Airlines, including United, are simply not designed to have their largest hub and capacity severely limited for four consecutive days and still operate successfully,” Kirby said in a note to employees this weekend.

He said the airline would have to reduce its schedule in Newark, especially during spring and summer thunderstorms to avoid crowds unless there was more capacity at the airport.

Thunderstorms are difficult for airlines because they can appear with little warning and are more difficult to predict than other types of weather such as hurricanes or winter storms.

More often than not, airlines will delay flights waiting for thunderstorms to clear and airspace to open, but crews can hit federally mandated workday limits, adding to the disruptions.

David Neilman, Founder and Former CEO, Inc JetBlue Airways And the chief executive of Breeze Airways, said there’s not much an airline can do when there are such steep cuts in airline access fares.

He said airlines could cancel preemptively just for the weather to improve.

Delta Airlines On Tuesday it raised its forecast for second-quarter and full-year adjusted earnings of $6 per share, at the high end of the estimates it provided last April, as strong demand for travel and swaps for more expensive price categories continues to drive growth.

Delta forecasts adjusted earnings per share of $2.25 to $2.50 for the second quarter, up from the previous range of $2 to $2.25 per share. CEO Ed Bastian said the company’s second-quarter earnings, which are set to report next month, could be its highest ever for the April-June period.

“Demand, as any traveler knows, is off the chain,” Bastian said in an interview on CNBC’s Squawk Box.

Shares of Delta rose 6.8% Tuesday to $46.09, the highest level in more than two years.

In a presentation to Investor Day Tuesday, the airline also raised its estimate for free cash generation this year to $3 billion from $2 billion. Delta redistributed its quarterly dividend earlier this month.

Delta and its competitors are reporting strong demand for travel, particularly for international flights, while other sectors are struggling while consumers grapple with inflation and other challenges. The airline industry also faced growth constraints due to lack of air traffic controllers, delays in new aircraft, and lack of new pilots, which helped stabilize prices.

But in addition to elastic demand, airlines are also enjoying jet fuel prices, which are down about 30% from a year ago.

Delta on Tuesday forecast that revenue per available seat mile, a measure of how much money the airline makes for the amount it flies, will rise as much as 18% year-over-year, up from a previous forecast of 15% to 17% growth.

The airline has repeatedly promoted customers’ willingness to buy more expensive seats, from extra legroom seats to first class. Premium revenue will be around $19 billion this year, accounting for 35% of total revenue, up from 24% in 2014.

The company also said its profitable partnership with American Express credit cards continues to grow, bringing in an estimated $6.5 billion this year compared to $4 billion in 2019.

A lot has changed in the four years since one of the aviation industry’s biggest air shows took place in person.

The Covid-19 pandemic has devastated the demand for travel, the airline industry has dumped thousands of experienced workers and a roller coaster appetite for new planes has wreaked havoc on new aircraft production rates.

After all, the Paris Air Show—a trade event in which companies get a chance to showcase new technology, commercial and military aircraft, and strike deals—returns Monday during a surge in demand for air travel, as airlines starve to feed. . The question is whether BoeingAirbus and its many suppliers can catch up.

“This creates pressure on the order books – it creates upward momentum in used aircraft leasing prices and forces airlines to make concessions,” said Andy Cronin, CEO of aircraft leasing Avolon.

Flight analytics firm IBA estimated last week that there could be orders for about 2,100 aircraft during the show as airlines replace aging planes and prepare for future growth in air travel.

over the past year, Boeing Recorded large orders or preliminary agreements from clients incl United AirlinesSaudi Arabia and the new Saudi carrier, Riyadh Air. Air India’s huge order earlier this year included both Boeing and Airbus aircraft.

The head of Turkish Airlines told reporters last month that the company plans to order about 600 aircraft, both wide-body and narrow-body. Demand would be the largest ever for a single airline, though it’s not clear if that will meet in time for supply.

The IBA’s chief economist, Stuart Hatcher, wrote in the June 15 forecast that Delta AirlinesMalaysia Airlines and KLM Air France may be buyers, but the timing is not yet certain. He said Air Baltic might also look to expand its fleet of Airbus A220s.

“It may still be too early to call any Chinese expansion just yet given the political climate, but I wouldn’t be surprised to see top-up requests,” Hatcher wrote.

The main challenge for manufacturers now is to increase production. The slots of narrow-body jet aircraft, such as the Boeing 737 and Airbus A320, have been sold for years. Now that long-haul flights are back, some airlines may also be looking to expand their fleets of large, long-haul aircraft.

But customers around the world have had to wait longer than expected for new planes as Boeing, Airbus and a worldwide network of suppliers try to ramp up production. This has resulted in limited airline capacity, making airfares high.

Qantas CEO Alan Joyce told CNBC last week that he expects supply chain problems to continue into 2025.

Boeing and Airbus are scrambling to raise production rates for the coming years to meet this demand.

Production delays have also pushed up charter prices for new and old aircraft as airlines look for other opportunities to boost flights.

New Boeing 737 Max 8s are being rented for about $350,000 a month in July, up from $305,000 in January 2020 as the pandemic began, according to IBA estimates. The new Airbus 320s will go for $355,000, up from $325,000 during that time. Older versions are close to pre-pandemic levels.

“People just want their planes,” said Richard Aboulafia, managing director of consultancy AeroDynamic.

A federal judge ordered Friday American Airlines And JetBlue Airways To end their partnership in the Northeast, the Department of Justice won after it filed a lawsuit to back out of the alliance, arguing that it was anti-competitive.

The lawsuit, filed in September 2021, alleged that the airline alliance was effectively a merger that would harm consumers by increasing fares. The trial began a year later in Boston and concluded in December.

Both airlines expressed disappointment at the decision and said they were considering next steps.

“It makes the two partner airlines, each with a vested interest in the success of their joint and individual efforts, rather than active, long-armed competitors who regularly challenge each other in the competitive market,” said US District Judge Leo Sorokin. rolling.

Fort Worth, Texas-based American Airlines and New York-based JetBlue Airways have argued that they need a so-called Northeast Alliance to better compete with other major carriers such as Delta Air Lines and United Airlines at the region’s crowded airports.

“Whatever benefits to American and JetBlue from becoming more powerful—in the Northeast generally or in their shared rivalry with Delta—those arise from an explicit agreement not to compete with each other,” Sorokin wrote. “Such an agreement is just the kind of ‘unreasonable restraint on trade’ that the Sherman Act is designed to prevent.”

He ordered the airlines to terminate the partnership 30 days after the ruling. Carriers are likely to challenge the decision. A JetBlue spokeswoman said the company is studying the decision and evaluating next steps.

“We are disappointed with the decision,” the spokesperson said. “We made it clear during the trial that the Northeast Alliance was a huge win for customers. With NEA, JetBlue was able to grow exponentially in restricted Northeast airports, bringing airline fares and great service down more ways than would otherwise have been possible.” Unlike that “.

“The court’s legal analysis is clearly incorrect and unprecedented for a joint venture such as the Northeast Alliance,” an American Airlines spokesperson said in a statement. “There was no evidence on record of any consumer harm from the partnership, and no legal basis for inferring harm simply from the fact of the collaboration.”

Undoing the partnership will be difficult, especially during the height of the summer travel season, when airlines have already sold out.

JetBlue and American are not allowed to coordinate fares under the partnership, which was approved in the waning days of the Trump administration in 2021 and has since expanded.

JetBlue previously warned in the securities filing a judgment against NEA that “could have an adverse effect on our business, financial condition and results of operations.”

“In addition, we incur costs associated with carrying out NEA’s operational and marketing elements, which will not be recoverable if we are required to dispose of all or a portion of NEA,” the company said.

The Justice Department did not immediately respond to a request for comment.

The department separately in March filed an antitrust lawsuit to block JetBlue’s proposed acquisition of the low-cost carrier Spirit Airlinesarguing that the deal would lead to an increase in prices, “harming cost-conscious publications even more acutely”.

The combination faces a major hurdle to gaining approval from the Biden administration, which has vowed to take a hard line against what it views as anti-competitive deals.

United Airlines“The plan to refurbish cabins on its aging narrowbody planes is behind schedule due to supply chain strains,” the carrier told CNBC this week. Upgrades include larger luxury cabins, seatback entertainment screens throughout the aircraft, Bluetooth capabilities and other amenities.

The Chicago-based airline previously expected to retrofit 100 of its narrowbody planes with the new interiors by the end of the year, but now expects 60 to be completed by then, a spokeswoman said.

“The reality is supply challenges across the board be that as it may [inflight entertainment] Systems, chips, seats and many other things are more challenging than they’ve ever been in our business,” Andrew Nosella, United’s chief commercial officer, said on an earnings call last week.

United unveiled the overhauled cabins in June 2021 following an order for 270 new Boeing and Airbus’ narrowbody jets, in an effort to refresh its brand as airlines compete for passengers in the travel boom, especially big spenders.

United also said it expects to have more premium seats for sale per outbound flight than any other North American airline by 2026 as travelers compete for what could be elusive upgrades and the ranks of elite travelers with piles of frequent flyer points swell.

United’s Nocella said last week that the carrier will have multiple production lines to refresh the interiors of its narrow-body jets this summer, helping to pick up speed.

The company expects that one in three aircraft in its narrow-body fleet, including new aircraft, will have had an in-house upgrade by the end of the year.

“It’s going to take a little longer than we originally expected,” he said. He added that the United Airbus A319 was recently modified and is scheduled to fly soon.

The airline has targeted 2025 to complete the narrowbody upgrades, but it’s unclear if United will meet that target.

Separately, United said all of its wide-body aircraft will be equipped with premium economy seats and Polaris seats, the carrier’s first class on international and other long-haul flights, by August.

Other airlines such as Jet Blue And Delta Airlines They have also added amenities on their aircraft in recent years, upgrading their first-class classes, installing new seats and adding some services, including free Wi-Fi.

Delta executives said revenue growth for premium seats such as business class or premium economy has outpaced sales from the standard coach.

“We’re seeing a high degree of stickiness with these products,” Delta president Glenn Hounstein said on the company’s quarterly call earlier this month. “So once you start flying in those cabins, you don’t tend to go back.”

NEWARK, N.J. — Faced with crowded airports, rising costs, a shortage of pilots, and a resurgence in travel demand, airlines are increasingly turning to the same remedy: bigger planes that hold more passengers.

The 11 largest US airlines averaged more than 153 seats last year on domestic flights, up from about 141 in 2017, according to flight data firm Cirium. In April, US airlines took 0.6% more seats into their domestic schedules than in the same month in 2019, despite operating 10.6% fewer flights.

The trend toward larger planes, part of a strategy known in the industry as “upgrading,” means airlines can sell more seats per flight and settle for fewer planes, which are in short supply. While more passengers per plane lowers unit costs for airlines, that means fewer flight options for consumers.

For example, United Airlines It said its flights have 20 more seats per flight in its full network than in 2019.

Rodney Cox, United’s vice president of airport operations at the carrier’s hub at Newark Liberty International Airport, told CNBC last month that it’s difficult to increase the number of flights to and from the airport, which is one of the largest in the country. not crowded.

“The way we continue to grow our model and grow the business is to upgrade our flights,” he said.

United said last month it would fly about 3,600 domestic routes using wide-body aircraft. The airline has also designated the 777, the largest plane in its fleet with 364 seats, to fly between major hubs and Orlando, Florida, during spring break, a spokeswoman said.

Early in the Covid pandemic, US airlines reallocated their largest planes to domestic routes when international travel was hampered by the crisis and travel restrictions. Now that international flights are starting to pick up, the competition for those planes is even more intense.

Cox noted that there are limits to the number of flights an airline can increase, especially with its larger aircraft.

“Not every gate is equal,” he said. “You can’t put on a wide body [airplane] on each gate.

The trend towards larger planes It is becoming increasingly important during what airline executives expect to be a busy spring and summer with shortages of pilots, air traffic controllers and new aircraft.

United Cox vice president said keeping the operation running smoothly in busy Newark is key. If the planes don’t take off fast enough on schedule, he said, because of the limited number of gates, “you’ll see it turn into a parking lot.”

Airlines and federal officials have agreed to curtail flights in hopes of avoiding a repeat of this summer’s flight cuts and schedule delays at the busy airports serving New York and Washington, DC.

Last month, the FAA said it would allow airlines to cut back flights at airports serving New York City and Washington’s Reagan National Airport as a way to avoid disruptions.

American Airlines He said that in response to the FAA-sanctioned slot waivers, he will temporarily reduce frequencies on select routes from LaGuardia Airport and Newark this summer.

“We are proactively engaging with affected customers to provide alternative travel arrangements,” a spokeswoman said. The airline plans to reallocate aircraft from the reduced frequencies to routes at its hubs at Dallas-Fort Worth International Airport, Chicago O’Hare and Philadelphia International Airport.

United Airlines said in a statement Thursday that in response to the FAA’s plan, it will reduce peak daily flights in New York and Newark from 438 to 408 and reduce service from the New York area to Washington, DC. The company said it still plans to operate 5% more seats at those airports compared to the same month in 2019 and expected less than 2% of customers to be affected.

Delta AirlinesThe chief operating officer also told the FAA that the airline intends to obtain waivers that would allow it to reduce flights.

The FAA said it expects “airlines to take measures to minimize the impacts on passengers, including operating larger planes to carry more passengers and ensuring that passengers are fully informed of any potential disruptions.”

Even so, some airlines are facing challenges in switching to larger planes. JetBlue Airwaysfor example, all narrow-body aircraft operate.

“We don’t have 70 seats that we can turn into 150[-seater]Robin Hayes, CEO of JetBlue, told CNBC last week. And even the airlines that do, you’re just taking seats from somewhere else. “

In addition, the airline does not contract with regional carriers for as many of its flights as the major US carriers.

“This will have a very significant financial impact on JetBlue and our customers,” Hayes said of the reduced capacity. “Small communities always have a disproportionate impact on that.”

To help increase the number of passengers per plane, United and other network carriers are also working to reduce their reliance on regional feeder airlines, where pilot shortages are acute and unit costs high.

Delta said 70% of its domestic flights this year are operated by the main carrier, up from 55% in 2019. Seats per flight increased by 15 from 2019, a spokesperson told CNBC.

Delta has also shifted from regional to mainline aircraft such as Airbus A320s and Boeing 737s on traditional business routes such as Boston to Chicago, Seattle to San Francisco, and Los Angeles to Las Vegas. A spokesperson said it has completely canceled regional flights to Las Vegas, Houston, Dallas/Fort Worth and San Antonio, Texas, and replaced them with larger ones.

Some major airlines have suspended services to some smaller airports, citing a shortage of pilots for regional airlines. America last year left cities including Dubuque, Iowa, and United recently said it would stop flying to Erie, Pennsylvania, in June. Delta also said it would pause service at State College, Pennsylvania, and La Crosse, Wisconsin that month.

Faye Malarkey said reducing regional flights instead of mainline flights “could cut departure options in half for travelers, meaning long layovers, longer journey time and cost burdens, but it could also mean that one city it previously served could not be served.” “. Black, president and CEO of the Regional Airline Association.

“This is additional harm to small communities who don’t have passengers to fill on larger planes,” she said.

– CNBC Gabriel Curtis Contribute to this article.

The Federal Aviation Administration on Wednesday announced measures to try to avoid a repeat of disruptions at airports serving New York City and Washington, D.C., this summer as they grapple with a shortage of air traffic controllers at a key facility in the area.

The agency said it would reduce flight requirements for airlines’ take-off and landing rights to avoid congestion. Airlines have until April 30 to submit requests to give up take-off and landing spaces.

The waiver will run from May 15 through September 11. 15.

Airline executives have repeatedly complained about air traffic control deficiencies that have contributed to flight disruptions as air travel has jumped from pandemic lows in the past few years. Last summer, airlines also reduced their schedules to avoid delays as they dealt with their own staffing issues and other pressures.

The FAA said it expects more delays in the New York City area this summer than last year, and expects a 45% increase in delays with operations growing 7%.

United Airlines It said it would seek a waiver of certain use of takeoff and landing assignments at the three largest airports in the New York area and Ronald Reagan Washington National Airport. In a letter to Acting FAA Administrator Billy Nolen on Wednesday, United said it will use planes with more seats to make up for the reduced number of flights and offer alternative flights to affected customers.

Delta Airlines He applauded the FAA’s measure.

“Delta reviews our network to ensure the best customer experience throughout the summer travel season, and we are committed to working with the FAA on measures to ensure the safety and efficiency of operations at New York/NJ airports,” the airline said in a statement. .

Later this month, the FAA will hold a summit with airlines about other ways they can mitigate turbulence in the region. It held a similar event last year in Florida where airline passengers faced delays caused by bad weather, high demand and congestion over issues such as space launches and military exercises.

United Airlines On Monday, he said new technology would open up more seats on his flights so kids can sit with an adult in their party without paying a fee, a type of fee that has been scrutinized by the Biden administration in recent months.

United will show parents or other adult travelers accompanying a child under 12 years of age access to the Preferred seats in addition to the regular economy seats, if required, at the time of booking so they can be seated together.

The change applies to travelers with basic and basic economy tickets and will be in full effect next month, although United has already increased some available seats.

The airline will also not charge customers a fare difference if they switch to the same destination that has adjacent seats.

In recent years, airlines have charged passengers to reserve seats in their “preferred” location on flights. They do not come with extra legroom or other benefits but are often in front of the aircraft, although they can cover a large number of aircraft seats.

President Joe Biden called on lawmakers to “expedite the ban on family sitting fees,” the White House said earlier this month. In July, the Department of Transportation required US airlines to “do everything they can” to ensure that passengers under 13 are seated alongside an adult companion at no additional charge.

“Baggage fees are bad enough,” Biden said during his State of the Union address earlier this month. “Airlines can’t treat your child like a piece of baggage.”

These seats usually vary in price. On a round trip between Newark, NJ, and Los Angeles in August, preferred seats on a United flight were offered at $37 each way for one person.

Delta Airlines She said she is blocking certain rows of seats so families can sit together.

“Delta does not charge a family seating fee and regardless of the class of tickets purchased, will always work with customers on a case-by-case basis to ensure that their family seating needs are met,” a Delta spokesperson said in a statement Monday.

American AirlinesThe booking platform will automatically search for available seats together at the time of booking for the main cabin and basic economy passengers. A CNBC spokesperson said preferred seats and the extra legroom section, Main Cabin Extra, open the day of departure if needed.

Delta AirlinesFourth-quarter earnings beat analysts’ expectations, and its revenue grew higher than it was three years ago, the latest signs of consumers’ willingness to fly.

The airline made $13.44 billion in the last three months of 2022, surpassing the $11.44 billion in sales it generated three years earlier. Higher costs eroded some of Delta’s profits, but its net income still came in at $828 million, down from $1.1 billion in the same three-month period in 2019.

Delta CEO Ed Bastian said in a press release that the company “rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance.”

Here’s how Delta performed in the fourth quarter, compared to Wall Street’s expectations based on Refinitiv consensus estimates:

• Adjusted earnings per share: $1.48 vs. expected $1.33.
• Adjusted revenue: $12.29 billion, excluding refinery sales, vs. $12.23 billion expected.

Airlines were largely upbeat about the latest quarter, despite concerns about a recession and weakness from some retailers and other businesses. Thursday, American Airlines It raised revenue and profit forecasts for the period, which led to a widespread rally in the sector.

That was even after severe winter weather disrupted flights coast-to-coast over the year-end holidays, prompting mass cancellations. Southwest Airlines In particular, she struggled to recover and said her collapse could cost her more than $800 million. America Southwest reports on January 3. 26.

Delta expects to earn 15 cents to 40 cents per share on an adjusted basis in the first quarter of 2023 and increase sales 14% to 17% over the same quarter in 2019. It expects full-year 2023 earnings of $5 to $6. Period.

Delta shares fell more than 4% in pre-market trading.

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