Demand, costs in focus as U.S. airlines report earnings

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Major U.S. airlines are poised to post their strongest earnings since the start of the pandemic when they report quarterly results starting on Wednesday.

But mounting economic worries are unsettling their investors, who are looking for clues to gauge the strength of consumer demand beyond the busy summer travel season.

Inflation at a 40-year high and rising interest rates have raised the specter of an economic recession in the United States. With air fares also surging, some analysts are warning of a slowdown in travel spending in the second half of the year.Those worries have battered airline shares even as booming travel demand is driving up the industry's revenue.has fallen 25% since late May. In contrast, U.S.

Analysts at Jefferies are not sure if the demand will remain as strong in the fall. In a note, they said airline revenue is expected to "materially weaken" in September following a moderation in leisure travel demand. Airline chiefs, however, have played down those concerns. They are betting healthy U.S. household savings as well as strong pent-up demand will help fill flights.

 

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