Get ready for higher fares: Airlines bet surge in travel demand will help offset fuel costs

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American Airlines planes at LaGuardia Airport
Leslie Josephs | CNBC

Travel demand has bounced back faster than expected, airlines said Tuesday, a welcome trend for the industry as carriers grapple with how much of a fuel-price surge they can pass along to customers.

Delta Air Lines said ahead of an investor presentation that it expects first-quarter sales will be 78% recovered compared with 2019, up from a forecast in January for a recovery as little as 72% of 2019 levels.

Airlines have been comparing revenue and capacity to 2019 to show how much they have recovered since before the pandemic.

United Airlines said it expects first-quarter revenue to “be near the better end” of guidance for a 75% to 80% recovery from three years earlier.

Shares of the carriers rose 5% apiece in premarket trading.

“System bookings for future travel have improved close to 40 points since the first week of 2022 and business traffic has increased more than 30 points since the peak of the Omicron impact in January 2022,” United said in a filing.

Southwest Airlines raised its revenue outlook to as much as 92% recovered from 2019 levels. Southwest shares were up 3.5% in premarket trading.

This is a developing story. Check back for updates.

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