Loading

US global airlines work feverishly to offset cost headwinds in 2018 after cost escalation in 2017

Cost inflation has been a major headwind for nearly every US airline in 2017, and the country’s three largest global network airlines are no exception. American, Delta and United are offering unit cost inflation forecasts excluding fuel ranging from 3% to 5.5%.
There is a variety of factors driving cost pressure for those airlines, spanning from growing labour costs to higher depreciation and amortisation expenses.

American and Delta are pledging to keep their 2018 unit cost inflation at 2% or less, while United, for now, is refraining from offering a cost forecast for next year. At one point, United believed it could deliver a unit cost performance of less than 1% growth from 2018 to 2020, but analysts and investors are becoming increasingly sceptical that the airline can meet those targets after a series of missteps in 2017.

American is pushing a longer term view on cost inflation, noting the industry as a whole is catching up on important and necessary investments in airport infrastructure and employee salaries and benefits. The airline believes once those investments are complete, cost pressure in those areas should abate.

This CAPA Premium Analysis article is 1,118 words.

To access CAPA Premium Analysis you need a CAPA Membership

Your window into the latest insights

CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.

Big picture strategic view

Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.

Global intelligence

The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.

Customise your Alerts

CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.

I'm very impressed by the factual and detailed analysis CAPA is always doing.

- CEO, Airline Member
To learn more, contact us:
Phone: +61 2 9241 3200 | Email: membership@centreforaviation.com