Airlines are adding capacity despite some shaky Q3 earnings and a looming government shutdown.
Overlooking DFW Airport’s Terminal B (Photo: AirlineGeeks | William Derrickson)
Following a record Summer 2023 season, U.S. airlines are setting their sights on the upcoming Thanksgiving holiday period. Shaky third-quarter earnings for some carriers coupled with an ongoing shortage of pilots – particularly captains – have prompted some airlines to rethink Thanksgiving capacity.
Often heralded as the busiest travel period of the year in the U.S., it is not uncommon to see airlines add capacity, especially after the post-summer travel lull. With some carriers now on Wall Street’s hot seat, Thanksgiving can serve as a preview for December performance.
In 2022, the TSA screened a record-setting 2.56 million passengers at its checkpoints on the Sunday after Thanksgiving, the most since 2019. The year 2023 is on track to eclipse this record.
According to data from aviation analytics group Cirium, Sunday, Nov. 26, 2023 will be the year’s busiest travel day. U.S. airlines have scheduled 3,070,965 seats and a total of 22,033 flights.
“Bring your patience. The airports will be full and while a lot of people have taken to the skies since the pandemic there will be many that are not as familiar or infrequent flyers who might take longer at security checkpoints. Arrive a touch earlier than usual,” says Mike Arnot, a spokesperson for Cirium.
Outpacing even some peak July days, the Thanksgiving 2023 plan also exceeds 2022 by the number of flights across major U.S. carriers. Not all airlines are created equal in their Thanksgiving 2023 quests though with some even trimming year-over-year capacity.
While most airlines added capacity compared to Thanksgiving 2022, some bucked that trend. Ultra-low-cost startups Avelo and Breeze lead the capacity-adding charge with double-digit growth in seats, according to Cirium. Breeze has nearly 30,000 more seats in 2023, representing an 80% increase.
“A number of airlines in the lower cost end of the spectrum had a challenging third quarter and surprisingly so. They have only just began to trim their schedules to reduce capacity and therefore costs. They will be looking to reduce costs on routes that aren’t working or where capacity can be better deployed elsewhere,” shares Arnot.
All three major U.S. airlines – Delta, United, and American – have also added capacity with Delta leading at 6% growth compared to American and United’s 4%. After reporting a net loss of $157.6 million in Q3 2023, Spirit only modestly trimmed its schedule, but the airline’s Thanksgiving 2023 capacity is still 10% larger than in 2022.
“For instance, Spirit announced its exit from Denver in January 2024. There are still plenty of options to get to Denver. This will help Spirit’s margins generally and will likely increase yields for the airlines like Frontier at Denver. This is the calculus that will take place route by route, month by month, and airline by airline. It’s math and the airline revenue managers and network planners are actually adept at that,” Arnot continued.
A Spirit Airlines Airbus A319 prepares for landing. (Photo: AirlineGeeks | William Derrickson)
While most U.S. airlines added capacity during Thanksgiving when compared to 2022, JetBlue did not. The carrier trimmed its schedule by 8% year-over-year, representing a reduction of 46,718 seats. Similar to Spirit – which JetBlue is in a legal battle to acquire – the airline reported a net loss of $129 million in Q3 2023.
Despite improved Summer 2023 operational performance, U.S. airlines are still being closely watched. Southwest’s late-December 2022 meltdown – in which the carrier canceled over 14,000 flights – has put other airlines on notice during peak holiday periods.
“At the same time, U.S. airlines have had solid operational performance so far in November, and are generally on time. This bodes well for Thanksgiving. They will be prepared for operational challenges due to weather or air traffic control reductions and IROPs. Let’s hope for smooth sailing. Nobody remembers Thanksgiving 2022 but everyone remembers late December 2022,” adds Arnot.
Cirium’s on-time performance data indicates near-perfect completion factors across the U.S. airlines, averaging at over 99% in early November.
In light of last year’s meltdown, Southwest says it is ready to brave winter weather constraints across its network. “So preparing to prevent something like that from happening again was and is an imperative,” Southwest COO Andrew Watterson said during the company’s Q3 earnings call.
“As a result, our action plan is divided into three categories: winter operations, cross-team collaboration, and accelerating operational investments, which were already on our road map, including technology,” Watterson added. “We are now so much better prepared for these extreme weather events.”
A potentially looming government shutdown could also complicate Thanksgiving plans, per Bloomberg. If the government were to shut down on November 17, thousands of FAA air traffic controllers, TSA screeners, and U.S. Customs officers would be left unpaid just days ahead of the year’s busiest travel period.
 (imgl9125).jpg)
Receive a daily dose of the airline industry's top stories along with market insights right in your inbox.
Southwest Airlines announced the next phase of its board’s transformation on Tuesday as six directors are slated to retire in…
The U.S. Department of Transportation (DOT) has launched a federal inquiry into the four largest U.S. airlines’ rewards programs in…
Elliott Investment Management now owns 10% of Southwest’s common stock and can call a special meeting at the carrier, according…
