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Originally published Thursday, August 21, 2014 at 12:54 PM

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Labor Day forecast: Busier skies, as airlines cash in

Big carriers earn record profits despite worsening on-time records, high cancellation rates.


AP Airlines Writer

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A trade group for the nation’s big airlines predicts that air travel over the Labor Day weekend will rise 2 percent from the same holiday last year.

If correct, the forecast would be more good news for the airlines. Nine leading U.S. carriers earned $3.8 billion in the first half of this year, allowing them to pay down debt, reward shareholders and order new planes.

Those airlines are running profit margins of 5 percent, up from 2.1 percent in the first half of last year, according to the trade group Airlines for America. Revenue rose 6 percent, while their largest expense, fuel, fell 2.4 percent.

Airlines are making record profits even as more and more flights are late or never take off. In the first half of 2014, U.S. airlines posted their worst on-time rate since 2008 and the highest cancellation rate since 2000, according to government figures.

The airline group’s economist, John Heimlich, told reporters on a conference call that bad weather was the biggest factor in delays and cancellations. He said that despite difficult weather and high federal taxes, “the airlines have coped very well.”

The airline group predicted Thursday that 14 million people would fly on U.S. airlines during the seven days ending Sept. 2, the day after Labor Day. The busiest day is expected to be the Friday before the holiday weekend.

Separately, the auto club AAA forecasts that 34.7 million Americans will travel at least 50 miles from home by car or plane over a five-day period ending on Labor Day. That would be a 1.3 percent increase over 2013. Airfares are 2 percent higher than a year ago, but motorists will catch a small break — gasoline is $3.44 per gallon, down 15 cents from Labor Day 2013, according to AAA.

The nine airlines that earned a combined $3.8 billion in the first half of 2014 are Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United.



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