First quarter earnings are expected to be low for US carriers, say analysts. High fuel costs, capacity cuts and fare hikes are all expected to hit US carrier’s bottom lines in the first quarter results due out soon.
Southwest will report later this week although it has already warned the market that it would not post a profit for the period due to high fuel prices. American remains in Chapter 11 and United Continental is still carrying merger-related costs.
However, Delta Air Lines is expected to show some improvement.
The unknown at this point is how far airlines can raise prices due to the high cost of furl before it starts to affect demand, which at the moment is holding up despite the weak economy. Further increases in fuel costs however would have a severe impact on several airlines and likely lead to more fare hikes.
Low expectations for Q1 results
