By 2021, U.S. airlines are expected to fly 1 billion passengers per year, reaching that mark faster than what had originally been forecast.
All that extra passenger traffic may have another benefit, too: fares are going up, and the average flier now is expected to pay 2% more. Tack on the many fees airlines charge and it translates into a nice profit. [The Airline ETFs Double Whammy.]
The big risk to watch for airlines is what’s going on now: tension in the Middle East and economic recovery has been sending gas and oil prices soaring. Fuel is the largest cost for airlines. Though they generally hedge price spikes by buying futures contracts, if costs go up much further, they could be in for some hurting.
Tisha Guerrero contributed to this article.