Corporate travel: US big 3 airlines cut capacity, grow revenues

The three major global US airlines, American, Delta and United, have all opted to reduce their 2018 capacity forecast for 2018 in light of growing fuel costs, and the fuel price pressure has resulted in both American and Delta lowering their share price guidance for the year.

During 2Q2018 Delta and United were able to capture about 75% of their respective increases in fuel, while American is declaring that a fuel price of USD75 per barrel is the new reality.

Despite the fuel cost headwinds, American, Delta and United have reasonably positive outlooks for their respective corporate performance, although American is warning that its overall unit revenue growth rates are slowing in comparison with its two largest competitors, and the airline has decided to make changes in its basic economy offering to bolster its position among cost conscious customers.