Airlines are expecting to raise prices on airplane tickets for consumers this year as capacity remains limited due to Boeing¡¯s large backlogs of deliveries while at the same time, demand for those seats continues to be at a high.?

According to Reuters, the International Air Transport Association (IATA) expects a 15 percent increase in net profit for North American airlines, while European carriers are expected to increase fares 12 percent this year. The association's year-end data found air travel demand grew globally by 10.4 percent from 2023. It predicted this year will see 8 percent growth.?

Delta, United and Alaska all have predicted rising profits in 2025. For example, Delta reported $3.4 billion in free cash flow in 2024, but it predicts this to increase to $4 billion in 2025. Its full-year earnings per share was $5.33. This year it¡¯s predicted to increase to $7.35.?

ARC reported that U.S. air ticket sales were the highest they¡¯ve ever been in 2024, reaching over $99 billion, up four percent from 2023. Ticket prices in December 2024 were four percent more than in 2023.?

Both Boeing and Airbus are struggling to deliver aircraft on time, creating challenges as the demand for travel continues to grow without the number of operating aircraft to encourage this growth.?

Boeing alone is backlogged 5,500-some aircraft. Yet it just about doubled its number of deliveries in January, delivering 44 aircraft to airlines in the first month of the year. It delivered 25 aircraft in January 2024.?

Last year, air carriers found competition by providing an excess of seats available. Experts believe domestic seat growth will slow the most in a decade this year.?

There¡¯s another factor that could potentially slow travel demand and increase airfares at the same time: President Trump¡¯s tariffs, which would prompt a trade war.?

Daniel McKenzie, analyst at Seaport Research Partners, told Reuters he thought tariffs were a ¡°macro wildcard¡± for the aviation industry. ¡°Trade wars are bad for demand,¡± said McKenzie.?

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