U.S. Airline travel highest since 2007
The number of people traveling on airplanes this summer is expected to reach a record-breaking 222 million between June 1 and August 31, according to Airlines for America, the industry’s trade group. Airline travel is up 4.5% from last year, putting the number of travelers taking to the skies 2% above the previous record of 217.6 million, set in 2007.
Fueling the Friendly Skies
According to the Bureau of Transportation Statistics (BTS), airlines in the United States consumed 16.2 billion gallons of jet fuel in 2014, equaling $46.3 billion in costs. In 2007, the last record-setting summer, airlines used 4.8 billion gallons of fuel between June and August, spending $17.4 billion.
Fuel costs are the airlines’ main burden. One airline, Delta (ticker: DAL), bought its own refinery back in 2012 when fuel prices were much higher than today, when the airline was burning the equivalent of about 260,000 barrels a day when oil was $90+ per barrel. Today’s fuel savings comes from the 40%-50% drop in crude oil prices, not the refining spread. While its fuel costs are lower, analysts say the airline hasn’t achieved net savings from the investment.
Cramming in More Seats
To meet growing demand, airlines are expected to add 4.6% more seats, or 126,000 per day, reports The Chicago Tribune. Added seats have led some analysts to believe that airlines may have to discount their prices, but so far this has not come to fruition.
The average round-trip ticket this summer, including taxes, is $454, down less than 1% from last summer. International flights have fallen to $1,619 for the average ticket to Europe, down 3% from last summer.