US airlines experiencing no deterioration in demand; but 2H2023 proves uncertain

US airlines continue to remain bullish about demand as a record summer in the Northern Hemisphere is on the horizon.

American Airlines issued updated financial guidance and explained that it had not been operating the same levels of capacity as it was before the COVID-19 pandemic, given the constraints that are affecting all airlines, including pilot staffing shortages, supply chain issues and - particularly in the US - airspace system constraints.

Other US airlines have not updated their financial guidance, but at the end of 1Q2023 United Airlines CEO Scott Kirby told analysts and investors that demand remained strong. And while some macroeconomic pressure could create a certain level of murkiness during 2H2023, at this point the region's operators do not see any worrying signs of demand deterioration.

Numerous constraints in the industry are also creating a supply-demand imbalance, which bodes well for revenues for operators in North America. But even as fuel prices are dropping, US airlines continue to face some cost pressure - particularly as new pilot contracts come into force. And if demand does soften later in the year, the ability of airlines to offset cost pressures with higher fares could weaken.