US airlines' shares jump as airfare data signals improving pricing power
Shares of legacy carriers United Airlines (UAL.O), opens new tab, American Airlines (AAL.O), opens new tab and Delta Air Lines (DAL.N), opens new tab jumped nearly 10% each, while budget rival Southwest Airlines (LUV.N), opens new tab gained 4% in afternoon trading.
Smaller peers Alaska Air (ALK.N), opens new tab and JetBlue Airways (JBLU.O), opens new tab rose about 10% each and low-cost carrier Frontier Group (ULCC.O), opens new tab surged 22%.
Data from the Labor Department's Bureau of Labor Statistics on Tuesday showed airfares rose 4% in July after slipping 0.1% in June, marking their first increase in six months.
Uncertainty stemming from President Donald Trump's sweeping tariffs and budget cuts has prompted travelers to curb discretionary spending and reassess plans.
A soft demand environment, particularly from budget-conscious domestic travelers, had forced carriers to discount fares, squeezing margins despite summer typically being their peak money-making season.
Airlines have since been trimming seats on offer and readjusting routes to keep their pricing power in control and shield margins.
During their second-quarter earnings calls in July, major executives expressed confidence in the industry's ability to cut capacity and boost airfares in the latter part of the year.
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