Fuel, Geopolitics Force US Airlines to Revisit Capacity Projections
US trade policy whiplash and rising oil prices are combining to create looming uncertainty for US airlines even as demand and revenue trends remain solid. Delta Air Lines is the first US carrier to come forward and revise its 2Q2018 EPS forecast downward; the company also plans to examine its capacity forecast for the US autumn period through the lens of rising fuel costs and a still-strong demand environment.
It remains to be seen how growing trade tensions between the US and Canada, Mexico and Europe will affect both US and global air travel demand later in the year. IATA has warned airlines could be affected by a protectionist agenda while revising its forecast for global airline profitability downward.
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