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<ul class="summary-list"><li>Private jet travel has surged in recent years, and two big changes explain why.</li><li>The COVID-19 pandemic pushed many to opt for private planes.</li></ul>Flying private has gotten a lot more popular over the last several years.The number of miles flown by private jets soared 53% between 2019 and 2023, while the number of private aircraft rose by 28%, according to <a target="_blank" href="https://affiliate.insider.com?h=bb670b62fe8601c53f0889bedb04ce80a89285ec5116fc9bfce8af0b92d7edbd&amp;postID=672e281e1153528a7c5476e4&amp;postSlug=private-jets-soaring-popularity-pandemic-costing-taxpayers-environment-2024-11&amp;site=bi&amp;u=https%3A%2F%2Fwww.nature.com%2Farticles%2Fs43247-024-01775-z%3Futm_campaign%3Dheatmap_am%26utm_medium%3Demail%26_hsenc%3Dp2ANqtz--vq6RgIU87OiaVJyWfQp3iftvp2MS7Dkc9PJqq0pmWvFSj6lVdf4st7myisjTFMgJFzXJTcDWFXZOM6BTtLE3b3ycu2NAARlpnMBLHahNAHpjJ1hM%26_hsmi%3D332998403%26utm_content%3D332998403%26utm_source%3Dhs_email">a major new study</a> published in Nature.Two big factors led to that spike in private flights: The pandemic and a spate of more affordable options for flying private.When the pandemic hit in 2020, both commercial and private flights ground to a near-halt. But soon, private jet travel surged even as <a target="_blank" class="" href="https://fortune.com/2024/04/29/business-travel-trends-pre-pandemic-levels-zoom-era-corporate-flights/">commercial flying remained depressed</a>.While <a target="_blank" class="" href="https://www.bts.gov/newsroom/full-year-2021-and-december-2021-us-airline-traffic-data#:~:text=U.S.%20airlines%20carried%20674%20million,2019's%20927%20million%20(unadjusted)">commercial airline ridership</a> was down 27% in the US between 2019 and 2021, over the same period, business jet flights were up from about <a target="_blank" class="" href="https://aspm.faa.gov/apmd/sys/bjpdf/b-jet-202410.pdf">3.8 million to about 4.4 million</a>. Many of those who could afford to avoid cramped commercial airline cabins — and the extra exposure to the virus that comes with that — <a target="_blank" class="" href="https://www.reuters.com/business/aerospace-defense/new-jet-set-how-covid-driven-boom-private-jets-is-still-flying-high-2022-05-02/">opted to charter or purchase a private plane</a>.Meanwhile, fractional ownership of private planes, fly-share services, subscriptions to private jet companies, and other on-demand private flying options have also grown <a target="_blank" class="" href="https://www.avbuyer.com/articles/business-aviation-market-analysis/new-jet-deliveries-to-fractional-programs-increases-113837#:~:text=Winding%20back%20the%20clock%2010%20years%20to,in%202023%20it's%20already%20risen%20to%2016.8%.">much more popular</a> and <a target="_blank" class="" href="https://www.cntraveler.com/story/all-the-ways-to-fly-private-starting-at-dollar100-per-flight">made private flying more accessible and affordable</a>.New services have made it possible to find and book private flights from a smartphone. While purchasing a private plane costs millions of dollars, on-demand private flying through newer services like Blade can charge <a target="_blank" class="" href="https://www.blade.com/price-new-york-miami">as little as $1,700</a> to jet <a target="_blank" class="" href="https://www.businessinsider.com/blade-one-private-jet-seat-new-york-miami-photos-review-2022-12">from New York City to Miami</a>. That's not much more than the <a target="_blank" href="https://affiliate.insider.com?h=2ed5c9bdb1346b6ac93979e86ed8f5005d86da32ff8ca9e12d99f23c589a9394&amp;postID=672e281e1153528a7c5476e4&amp;postSlug=private-jets-soaring-popularity-pandemic-costing-taxpayers-environment-2024-11&amp;site=bi&amp;u=https%3A%2F%2Fwww.momondo.com%2Fflights%2FFirst-Class-United-States-US0%2FMiami-MIA.fc.ksp%23%3A~%3Atext%3D%24981%2520is%2520the%2520average%2520price%2CAmerican%2520Airlines%2520flights%2520to%2520Miami%3F">nearly $1,000 price tag</a> of a typical first-class commercial ticket between those two cities.In the years since the COVID-19 outbreak, <a target="_blank" class="" href="https://www.businessinsider.com/affordable-luxury-air-travel-on-the-rise-private-jets-2024-6">industry experts say</a> customers have a higher budget for travel and are more willing to spend big to make it luxurious. These days, those who fly private say time savings and convenience are the biggest reasons, <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://privatejetcardcomparisons.com/2024/10/14/the-top-reasons-for-choosing-private-jets-over-airline-flights/">a recent survey</a> of private fliers found.Private jet usage peaked in 2022 and dipped slightly last year. But private travel was still <a target="_blank" class="" href="https://privatejetcardcomparisons.com/2024/03/25/2023-private-jet-flight-hours-dip-3-7-2007-to-2023-by-year-recap/">17% higher in 2023</a> than it was in 2019. This year, demand for private air travel <a target="_blank" class="" href="https://www.cnbc.com/2024/08/16/private-jet-flights-covid-era-demand-wanes.html">has fallen a bit more</a> as costs have risen. The industry expects the number of private aircraft will <a target="_blank" class="" href="https://aerospace.honeywell.com/content/dam/aerobt/en/documents/landing-pages/brochures/2023_BusinessAviationReport.pdf">grow by almost a third</a> by 2033.The uptick in flights has led to soaring carbon emissions from private jets. The Nature study found that climate-heating emissions rose 46% between 2019 and 2023.Private jets emit up to 14 times more climate-warming pollution per passenger than commercial planes, according to a report by the NGO Transport &amp; Environment <a target="_blank" rel="noopener nofollow" href="https://www.transportenvironment.org/discover/private-jets-can-the-super-rich-supercharge-zero-emission-aviation/">in 2021</a>, largely because of smaller passenger loads and shorter flights.The US is the biggest global hub of private aviation. While the US is home to about 4% of the world's population, the Nature study noted that about 69% of private jets are registered here.US taxpayers are <a target="_blank" class="" href="https://www.businessinsider.com/ultra-wealthy-private-flyers-are-costing-average-flyers-a-lot-in-taxes-2023-5#:~:text=Private%20jet%20travel%20has%20surged,Policy%20Studies%20and%20Patriotic%20Millionaires.">heavily subsidizing private jet travel</a>. Private jet travelers pay just two percent of the taxes used to fund the Federal Aviation Administration, despite making up one in six flights handled by the FAA's air-traffic controllers, <a target="_blank" rel="noopener nofollow" href="https://ips-dc.org/report-high-flyers-2023">according to a report published in May 2023</a> by the Institute for Policy Studies and Patriotic Millionaires. Private jets also use almost 3,000 of the country's smaller airports that aren't used by any commercial airlines, but are funded in part by the FAA, the 2023 report found.

Private jet usage is way up for 2 reasons

<ul class="summary-list"><li>Jack Sweeney's Threads accounts that track the flight paths of private jets have been suspended.</li><li>Meta cited privacy policy violations and potential physical harm as reasons for the suspensions.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/college-student-tracks-elon-musk-jet-forbes-30-under-30-2023-11">Jack Sweeney</a>, a college student who tracks the private jets of several high-profile people, including Elon Musk and Mark Zuckerberg, says his Threads accounts have been suspended.In a <a target="_blank" class="" href="https://www.threads.net/@jacksweeney?xmt=AQGz3wRkLkCXL0bB934661i2ZNHBn4wNBzyXAVc7-hXDZw">statement posted via his personal account</a>, Sweeney said all of his jet-tracking accounts had been suspended from the Meta-run platform. He said he received no warnings or communications from the Big Tech company before the accounts were suspended.Sweeney's accounts, which tracked the flight paths of jets belonging to Kim Kardashian, Donald Trump, along with Meta's CEO Zuckerberg, were among those affected.When asked about the suspended accounts, a spokesperson for Meta told Business Insider: "Given the risk of physical harm to individuals, and in keeping with the independent Oversight Board's recommendation, we've disabled these accounts for violating our privacy policy."Sweeney did not immediately respond to a request for comment made by Business Insider outside of normal working hours.Over the past few years, Sweeney has tracked and shared the flight data for some of the world's most powerful people. The data shared on the accounts is publicly available through the US Federal Aviation Administration, which Sweeney then distributes via social media accounts.Sweeney started by sharing data from the ADS-B Exchange on Twitter, now X, using automated bots. He has since expanded his accounts to Instagram and Threads and <a target="_blank" rel="" href="https://www.businessinsider.com/student-who-tracks-elon-musk-jet-launching-own-website-2023-2">launched his own database</a> for monitoring aircraft.The accounts have caused controversy and upset some powerful people, including Musk and Swift. Both have threatened Sweeney with separate lawsuits, with Swift referring to the accounts as <a target="_blank" class="" href="https://www.washingtonpost.com/technology/2024/02/06/taylor-swift-jet-tracking-legal-threat/">"stalking and harassing behavior."</a>The college student first made headlines in 2022 after Musk offered him money to stop publicly sharing his flight information. At the time, Sweeney was a freshman at the University of Central Florida in Orlando, studying information technology.He previously told BI he tried negotiating a higher price tag but never heard back from Musk.In December 2022, Sweeney's jet-tracking accounts were <a target="_blank" rel="" href="https://www.businessinsider.com/twitter-booted-elon-musk-jet-tracking-account-left-mark-zuckerberg-2022-12">suspended by X.</a> Musk, who took over the social media company months earlier, called the accounts a <a target="_blank" rel="" href="https://www.businessinsider.com/twitter-booted-elon-musk-jet-tracking-account-left-mark-zuckerberg-2022-12">"physical safety violation."</a>Since then, X has updated its policies to restrict users from sharing other people's live locations.

A college student who tracks Elon Musk and Mark Zuckerberg's private jets says his Threads accounts have been suspended

<ul class="summary-list"><li>A Cathay Pacific Airbus A350 U-turned on Monday due to an engine component failure.</li><li>After inspections, the airline found that 15 jets needed components replaced.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/best-first-class-lounge-hong-kong-cathay-pacific-the-pier-2024">Cathay Pacific</a> has canceled 24 flights and expects more to follow after discovering a problem with the Rolls Royce engines on over a dozen of its <a target="_blank" class="" href="https://www.businessinsider.com/air-india-airbus-a350-soon-flying-us-jfk-photos-2024-7">Airbus A350</a> jets.<a target="_blank" class="" href="https://www.businessinsider.com/rolls-royce-engine-factory-airbus-2017-6">Rolls Royce</a> said it would inform other airlines of any further developments. The same engine type is used on 88 aircraft around the world, according to ch-aviation data.Hong Kong-based Cathay Pacific said Monday that it began inspecting all 48 of its A350 jets after an inflight incident.According to data from Flightradar24, one of Cathay's jets was about 15 minutes into a flight from Hong Kong to Zurich early Monday morning when it turned back around.The airline said that upon inspection, it "identified an engine component failure" on the A350 in question.As a result, <a target="_blank" class="" href="https://www.businessinsider.com/cathay-pacific-asks-if-business-class-pax-would-bring-own-cutlery-2024-4">Cathay Pacific</a> said it inspected all 48 of its Airbus A350 jets within 24 hours. It found that 15 of them needed engine components replaced.The airline added that 24 flights have been canceled so far, 10 more are expected to be canceled on Wednesday, and potentially more up to Saturday.Rolls Royce's share price dropped as much as 5.7% on Monday but rebounded about 4% when the London Stock Exchange opened Tuesday morning."As well as providing support and guidance to Cathay Pacific, Rolls-Royce will also keep other airlines that operate Trent XWB-97 engines fully informed of any relevant developments as appropriate," the manufacturer said in a <a target="_blank" class="" href="https://www.rolls-royce.com/media/press-releases/2024/03-09-2024-statement-re-flight-cx383.aspx">statement</a>.It added that replacing the component can occur while the engine is still on the wing, reducing maintenance times.<div type="image" title="A close up of a Rolls Royce Trent XWB-97 engine on a Qatar Airways Airbus A350-1000 at the 2023 Paris Air Show" height="2267" width="3022" msid="113026958" hostid="261" sizebytes="630674"></div>Rolls Royce's Trent XWB-97 is the sole engine choice for the <a target="_blank" class="" href="https://www.businessinsider.com/see-inside-qantas-a350-1000-that-fly-worlds-longest-flight-2023-6">A350-1000</a>, the largest version of the widebody jet that can carry up to 480 passengers. The A350-900 uses a different Rolls Royce engine.According to ch-aviation data, Cathay Pacific is the joint-second top operator of the A350-1000, with 18 such jets. British Airways also has 18, while <a target="_blank" class="" href="https://www.businessinsider.com/toured-qatar-airways-airbus-a350-worlds-best-business-class-2023-6">Qatar Airways</a> has 24. Other operators include Etihad Airways, Japan Airlines, and Virgin Atlantic.Last November, <a target="_blank" class="" href="https://www.businessinsider.com/dubai-airshow-2023-highlights-most-important-moments-2023-11">Rolls Royce defended the Trent XWB-97</a> in the face of criticism from Emirates President Tim Clark.Cathay Pacific, one of just 10 airlines to be rated five stars by Skytrax, said it has "fully complied with all maintenance requirements of the engine manufacturer and stringent maintenance procedures are in place to ensure that our fleet is always operated safely.""This component was the first of its type to suffer such failure on any A350 aircraft worldwide," it added."At Cathay, safety of our customers and our people guides every decision we make. We sincerely apologize for the inconvenience caused and appreciate our customers' patience and understanding."Monday's inflight incident is being investigated by authorities in Hong Kong.

After an Airbus A350 U-turned due to an engine problem, an airline found 15 jets with the same issue

<ul class="summary-list"><li><keyword id="23113277" type="General" weightage="20" keywordseo="flyjets" source="keywords">FlyJets</keyword> CEO Jessica <keyword id="21219601" type="General" weightage="20" keywordseo="fisher" source="keywords">Fisher</keyword> said customers can fly private for cheaper by booking empty legs.</li><li>The startup has developed a new "fly empty" concept that matches customers flying opposite routes.</li></ul>While <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-private-jet-flights-hidden-again-faa-2024-7">flying private is largely reserved for the rich</a> and famous, online aviation charter marketplace FlyJets says it can offer the average traveler a cheaper way to experience the luxury. <a target="_blank" class="" href="https://flyjets.com/">FlyJets</a> CEO Jessica Fisher told Business Insider that the startup doesn't own or operate planes but works like an <a target="_blank" class="" href="https://www.businessinsider.com/built-vacation-house-tulum-mexico-airbnb-investment-2024-8">Airbnb</a> for private aviation. Its core business is serving as a middleman between aircraft providers and customers to secure and schedule charters. Within that is a cheaper alternative Fisher calls "fly empty," which she said can cut the cost of charters by nearly half. It's the latest way aviation companies are trying to make <a target="_blank" class="" href="https://www.businessinsider.com/affordable-luxury-air-travel-on-the-rise-private-jets-2024-6">private flying more affordable.</a> Fisher said that these charter aircraft might otherwise fly "empty legs" without passengers to return planes and crew to a home base after dropping off a client. Charter companies typically charge for a roundtrip regardless of whether anyone is on board, so it's cheaper to find another paying party for that empty leg. This concept isn't new. Several well-known <a href="https://www.businessinsider.com/taylor-swift-vistajet-private-jet-global-7500-jet-lag-tips-2024-3" target="_blank">private aviation companies, like VistaJet</a>, sell empty legs at a discount after someone else books a round-trip flight. However, Fisher said there's no guarantee the legs will sell, and they are <a target="_blank" class="" href="https://www.businessinsider.com/flying-on-75-million-bombardier-global-7500-private-jet-vistajet-2022-11'">typically pre-determined routes</a>, which means fewer options and flexibility for customers. Instead of taking other people's empty legs, Fisher explained that FlyJets fills empty planes by coordinating the entire trip as two separate legs from the start and splitting the price. "There's a lot we can do in terms of being very cost-effective for flyers and advantageous for aircraft providers in terms of aircraft utilization and, therefore, revenue," Fisher said. "It's a win-win." <h2>Flyers can save 40% on 'empty-leg splits'</h2>Fisher said customers can create empty legs online via the company's paid <a target="_blank" class="" href="https://www.instagram.com/p/C8mnNC4Mjcx/">FlyJets+</a> membership, which costs $290 annually, and flights are matched with another full party flying the opposite route. "If two parties need to <a target="_blank" class="" href="https://www.businessinsider.com/blade-one-private-jet-seat-new-york-miami-photos-review-2022-12">fly between New York and Miami</a> and they can commit to opposite legs, then they both save 40%, and the operator gets 10% more income from both of us," she said, adding that it's also better for the environment to have fewer empty planes flying. For example, Fisher said a seven-seater <a target="_blank" class="" href="https://www.businessinsider.com/see-inside-21-million-embraer-praetor-600-with-advanced-tech-2024-7">midsize plane</a> can cost $25,000 roundtrip for one party. But if FlyJets secures an "empty-leg split" for $15,000 in each direction, customers would pay about $2,100 per seat, and the aircraft provider could secure $5,000 more. <div type="image" title="The cabin as viewed from the aisle of an Embraer Praetor 600" height="3024" width="4032" msid="112720657" hostid="261"></div>Most fares for the same route on Delta Air Lines or <a target="_blank" class="" href="https://www.businessinsider.com/upgrading-united-polaris-review-business-class-2024-8">United Airlines</a> sit between $500 and $1,000 one-way through November. Fisher said when a match on the opposing route can't be found, customers won't get the "fly empty" price but can still book the plane outright at the market rate for the charter. She said this scenario will be less likely as FlyJets' network of planes and customers grows. The company also plans to launch a new "FlyJets Exchange" tool this fall that would allow flyers to buy seats on existing trips booked by other members, she said. <h2>There's a growing trend of affordable charters</h2>FlyJets joins a growing list of companies offering more affordable <a target="_blank" class="" href="https://www.businessinsider.com/embraer-phenom-300e-most-flown-aircraft-in-the-us-photos-2024-6">private air travel</a>. The experience remains pricey, but travel experts say people are willing to splurge. <keyword id="23113279" type="General" weightage="20" keywordseo="oliver-bell" source="keywords">Oliver Bell</keyword>, the cofounder of luxury travel company Oliver's Travels, told BI's <keyword id="23113280" type="General" weightage="20" keywordseo="mikhaila-friel" source="keywords">Mikhaila Friel</keyword> in June that this trend could be partly attributed to <a target="_blank" href="https://www.businessinsider.com/what-travelers-splurge-on-for-vacation-trends-2023-11">"revenge travel,"</a> where people are "willing to spend more for incredible experiences" after the lockdowns of the pandemic. In addition to the luxury, people who shell out for private travel save time. Charters are direct flights and typically <a target="_blank" class="" href="https://www.businessinsider.com/flew-out-of-general-aviation-airport-now-dread-commercial-flying-2022-1">operate out of small aircraft service stations</a> that require little or no security checks. This means customers can arrive within minutes of departure and avoid the busy airport terminal crowds. Take the <a target="_blank" class="" href="https://www.businessinsider.com/flying-semi-private-carrier-jsx-burbank-to-phoenix-flight-review-2023-4">semi-private air carrier JSX</a>, which offers flights across the US and Mexico as a shared plane but with the perks of a private trip. Shorter flights, like Las Vegas to Burbank, cost around $275 one-way, while longer routes along the East Coast corridor start around $700. <div type="image" title="JSX plane inside a private terminal." height="2268" width="3024" msid="112720655" hostid="261"></div><a target="_blank" class="" href="https://fly.kinectair.com/flex/">KinectAir</a> — a company selling empty legs in the traditional way — touts itself as a ride-share for the sky. <a target="_blank" class="" href="https://www.cnn.com/travel/cheaper-private-airplanes-kinectair/index.html">CNN</a> reported it sells short empty-leg repositioning flights across the US and keeps prices as low as $111 by using cheaper piston and turboprop aircraft instead of jets. The catch, however, is that the company can't sell individual seats, so the flyer has to book out the entire charter plane. "Of course, [flying private] is by no means a "cheap" way to fly as it still will typically be more expensive than flying commercial," Bell said. "But it is much more accessible than people think, which could be why we're seeing an increase now that people are becoming more aware." Correction: August 23, 2024 — An earlier version of this story mistakenly included NetJets as one of the companies that sell empty flight legs at a discount.

The CEO of a private aviation company explains the 'empty-leg' trick that can make chartering jets cheaper

The risky allure of WiFi Money: private jets, sports cars, and ruined investors

Future Retail, Jet Airways, Adani Enterprises and other hot stocks on January 6

<ul><li>Shares of <keyword id="6358200" type="General" weightage="20" keywordseo="jet-airways" source="Orion">Jet Airways</keyword> (India) were locked in a 5% upper circuit at ₹90.30 on Friday on news that the airline is in talks with Boeing Co and Airbus SE for an order worth $12 billion.</li><li>The airline, which has been grounded since 2019, is expected to resume its operations in the first quarter of FY23.</li><li>The new owners Jalan-Kalrock consortium's resolution plan for Jet was approved by a bankruptcy court in June.</li></ul>Shares of Jet Airways (India) are in the spotlight as the stock is locked in a 5% upper circuit at ₹90.30, on December 3, on news that the airline is in talks with aircraft manufacturers Boeing Co and Airbus SE for an order worth $12 billion. BloombergQuint reported that new owners -- Murari Lal Jalan and Kalrock -- said it could buy at least 100 narrow-body aircraft. The group is set to invest about $200 million through equity and debt in Jet over the next six months, said the media firm in a tweet. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[ ]]></cdata></div> The airline has been through a lot of turbulence in the last couple of years and is now in the news for resuming its operations by adding new aircraft. Jet Airways went to bankruptcy court after being grounded in April 2019. Later in June 2021 new owners -- UK-based Kalrock Capital Partners and UAE-based businessman Murari Lal Jalan -- took over the defunct airline. Now the airline is expected to resume its domestic flights in the first quarter of the next financial year that starts from April 1, 2022. <div type="image" title="jet air" height="900" width="1200" msid="88067635" hostid="261"></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/poor-demand-for-star-healths-ipo-forces-investment-bankers-to-cut-down-on-promoter-offerings/articleshow/88065207.cms">Poor demand for Star Health’s IPO forces investment bankers to cut down on promoter offerings; GMP at ₹10 discount</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/no-crypto-ban-in-india-sebi-will-reportedly-be-pulled-in-to-regulate-the-sector/articleshow/88065166.cms">No crypto ban in India — SEBI will reportedly be pulled in to regulate the sector</a>

Jet Airways stock flies on news that the airline is in talks to buy 100 aircraft ahead of its comeback

<ul class="summary-list"><li>Despite booming travel, airlines are struggling to turn a profit.</li><li>Southwest expects seat-mile revenue will decline up to 4.5%, while American predicts up to 6%.</li></ul><a target="_blank" href="https://www.businessinsider.com/why-flying-is-so-terrible-even-as-airlines-spend-billions-2023-5">Making money in the airline industry</a> has never been easy.It's a capital-heavy business with the constant need to expand and innovate while simultaneously managing ever-changing demand and costs.Expensive fuel, maintenance, and labor don't help, nor do unpredictable setbacks outside the airline's control, like pandemic travel bans and production slowdowns at planemaker <a target="_blank" href="https://www.businessinsider.com/boeing-whistleblower-said-was-threatened-to-keep-quiet-about-safety-2024-4">Boeing.</a>Despite the challenging environment, 2024 is still set to see record-breaking passenger numbers, according to the International Air Transport Association, or <a target="_blank" href="https://www.iata.org/en/pressroom/2024-releases/2024-06-03-01/">IATA</a>,<a target="_blank" href="https://www.businessinsider.com/north-america-lags-rest-world-air-travel-growth-iata-2024-4">With so many people traveling, </a>US airlines were poised for success. Some, like Delta, have found it. But across the industry, many airlines are struggling to turn profits thanks to issues like overcapacity, unrelenting competition, and unexpectedly high costs, according to experts.Take Southwest, for example, which in June <a target="_blank" href="https://www.forbes.com/sites/suzannerowankelleher/2024/06/26/southwest-guidance-activist-investor/">cut its forecasts</a> and now expects revenue per seat mile — a key financial metric for airlines — to fall by up to 4.5% where it had previously expected 1.5% to 3.5%.Before that, American in May <a target="_blank" href="https://www.cnbc.com/2024/05/28/american-airlines-outlook-chief-commercial-officer.html">warned</a> it expected the same metric to fall by 5% to 6% compared to last year. Its earlier prediction was 1% to 3%.Across the board, airlines have trailed the benchmark S&amp;P 500 index with more debt than the average publicly traded company and thinner margins.<h2 id="a747f0da-bf1e-4fc3-843e-1a4c8c95b821">Airlines got overambitious with their expansion plans</h2>Travel analyst Henry Harteveldt told Business Insider that thining margins are, in part, because airlines added too much to the market too fast amid confidence in the soaring demand and now can't sell all of those seats.<div type="image" title="Passengers check in for an American Airlines flights at O'Hare International Airport on October 11, 2022 in Chicago, Illinois." height="3648" width="5472" msid="111363746" hostid="261" sizebytes="801342"></div><a target="_blank" href="https://www.reuters.com/business/aerospace-defense/american-airlines-cuts-second-quarter-profit-forecast-2024-05-28/">Reuters</a> reported American hurt its pricing power after aggressive growth in its domestic market. The airline also missed out on revenue from <a target="_blank" href="https://www.businessinsider.com/american-airlines-ceo-admits-ticket-sales-strategy-change-mistake-2024-5">corporate customers due to a flawed ticket sale strategy</a> it has since admitted was a mistake to adopt."We're seeing softness in customer bookings relative to our expectations that we believe is in part due to the changes that we have made to our sales and distribution strategy," American CEO Robert Isom <a target="_blank" href="https://seekingalpha.com/article/4696281-american-airlines-group-inc-aal-bernstein-strategic-decisions-conference-transcript">said</a> during a May conference.Southwest also <a target="_blank" href="https://otp.tools.investis.com/clients/us/southwest/SEC/sec-show.aspx?Type=html&amp;FilingId=17642687&amp;CIK=0000092380&amp;Index=10000">cited</a> its struggle to predict demand as part of its revenue problem. And, unlike <a target="_blank" href="https://www.businessinsider.com/flying-ultra-low-cost-airlines-spirit-frontier-not-worth-it-2024-6">ultra-low-cost carriers</a>, Southwest doesn't charge extra for ancillaries like bags or seats — another missed revenue opportunity.In fact, <a target="_blank" href="https://www.businessinsider.com/southwest-airlines-call-for-changes-new-leadership-ceo-elliott-management-2024-6">activist firm Elliott Investment Management recently pumped nearly $2 billion</a> into Southwest, questioning strategies like its lack of add-on fees and calling for a board shake-up and the firing of Southwest CEO Bob Jordan.<h2 id="d2a52b4a-3d28-4f0b-9efd-98139d9092e8">Business travelers are booking fewer last-minute premium-priced tickets</h2>Part of the industry's overcapacity problem is because lucrative business travel still <a target="_blank" href="https://skift.com/2024/03/14/business-travel-could-stage-a-full-pandemic-recovery-in-2024/">hasn't</a> completely rebounded since the pandemic, Harry Kraemer, former CFO and CEO of healthcare firm Baxter International, told BI.Corporations aren't spending as much on last-minute business travel since the pandemic made Zoom and Google Meet more convenient."Half of the market is gone, and it's their highest margin," Kraemer said. "You've got all this excess capacity, and you've bought these planes, so what are you going to do with them."Further, Harteveldt said companies have become more price-sensitive and are looking for cheaper options, noting ULCCs Frontier and Spirit are even getting business customers.<div type="image" title="Frontier and Spirit planes on parallel runways." height="671" width="1024" msid="111363750" hostid="261" sizebytes="66842"></div>Over the past 12 months, shares of Spirit and Frontier have declined roughly 79% and 50%, respectively, far underperforming competitors and the market.In an effort to boost revenue, they've changed their strategies to capitalize on the demand for more premium perks, such as dropping change and cancel fees and creating "business" class-like seats.<h2 id="6389725c-7fc3-4d87-b301-17d0248f2bff">Boeing delivery delays have eaten into profits</h2>Harteveldt said <a target="_blank" href="https://www.businessinsider.com/boeing-door-plug-blowout-tanked-alaska-united-airlines-earnings-2024-4">Boeing's ongoing delivery delays have cost airlines</a> like American, Southwest, and United millions of dollars. This has forced them to adjust their planned flying, impacting revenue opportunities and flight availability.He also said the lack of new planes means airlines are flying older ones for a longer time. The costs of maintenance and lesser efficiency can add up, and customers can't get access to the nicer amenities and reliability of newer jets.<div type="image" title="Boeing 737 MAX airplanes are pictured outside a Boeing factory on March 25, 2024 in Renton, Washington." height="4201" width="7000" msid="111363756" hostid="261" sizebytes="604068"></div><a target="_blank" href="https://www.businessinsider.com/avelo-tiny-low-cost-airline-expanding-new-cities-list-2024-4">Airlines need to expand with new routes</a> and planes, he said — it's the nature of the highly competitive industry.However, Harteveldt noted these forced network shake-ups, like <a target="_blank" href="https://www.businessinsider.com/southwest-leaving-these-4-airports-amid-boeing-737-max-crisis-2024-4">Southwest's exit from four airports</a>, could be beneficial for better leveraging airline pricing power, as capacity can be brought back in line with demand."The airlines should find and serve routes that are the most profitable, and that means they may need to increase capacity in some markets and completely exit others," he said.Low-cost competitor <a target="_blank" href="https://news.jetblue.com/latest-news/press-release-details/2024/JetBlue-Announces-Termination-of-Merger-Agreement-with-Spirit/default.aspx">JetBlue Airways</a> overhauled its network to stay above water after its failed merger with Spirit.Harteveldt noted that <a target="_blank" href="https://www.businessinsider.com/airbus-lowers-targets-after-benefiting-from-boeing-struggles-2024-6">Airbus is also facing production setbacks that are</a> impacting deliveries and worrying investors, though not as dire as Boeing.<h2 id="374ee9ec-da65-4119-a789-f37c06ab3c0c">Airlines are plagued by high costs in an extremely competitive industry</h2><a target="_blank" href="https://www.businessinsider.com/hate-spending-consumers-economic-sentiment-retail-sales-inflation-gdp-growth-2024-4">Nearly everything is more expensive</a> than it was before the pandemic, and airlines are no exception."It's the worst possible combination of high fixed costs and inflation on the variable costs," Kraemer said, pointing to costs like planes, labor, and fuel. "There are so many permanent changes like virtual meetings that airlines will need several years to adjust for."Fuel costs in April were 33% higher than they were during the same time in 2019, according to the most recent <a target="_blank" href="https://www.bts.gov/newsroom/us-airlines-april-2024-fuel-cost-gallon-down-06-march-2024-aviation-fuel-consumption-54-0#:~:text=Year%2Dover%2Dyear%20changes%20in,increasing%205.2%25%20from%20April%202019.">report</a> from the Bureau of Labor Statistics. Meanwhile, <a target="_blank" href="https://www.businessinsider.com/airline-pilot-pay-salary-american-delta-united-captain-first-officer-2024-4">US airline pilots have gotten huge pay raises</a> in recent years to help fend off a labor shortage.For low-cost carriers like Frontier and Spirit, these high costs make it challenging to make money, Kraemer said. Still, they force competitor fares down — creating another profit obstacle for mainline carriers. <a target="_blank" href="https://www.iata.org/en/iata-repository/publications/economic-reports/global-outlook-for-air-transport-june-2024-report/">IATA</a> reported in June that <a target="_blank" href="https://www.businessinsider.com/flight-ticket-prices-cheaper-inflation-united-american-delta-junk-fees-2024-6">industry ticket prices, including ancillary, are 15% below 2019 levels</a> despite high growth.<div type="image" title="Spirit Airlines bag check" height="724" width="1086" msid="111363748" hostid="261" sizebytes="64150"></div>Harteveldt said beefing up revenue in any way possible is the best way to counteract the ever-growing costs."These days, it's less about having the <a target="_blank" href="https://www.businessinsider.com/best-time-buy-plane-tickets-travel-fly-airfare-airlines-inflation-2023-11">lowest costs</a> and more about generating the most revenue," he said, suggesting strategies such as charging for more ancillaries, reducing the number of discount tickets sold, or creating more enticing bundle packages.

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