What's up (and down) with airlines

Spirit Airlines has stolen the spotlight lately, soaring another 160% today on a Wall Street Journal report that a government bailout is on the way—but let’s not forget all the other airline drama taxiing around the runway.

For example: United Airlines surpassed top- and bottom-line expectations in Q1, but it’s in for a turbulent year ahead. Jet fuel prices have doubled amid the Iran war, forcing the airline to hike fares this summer by 15% to 20% while planning to cancel about 5% of flights this year. The company is bracing for full-year adjusted EPS to fall somewhere between $7 and $11—a far cry from the $12 to $14 forecast in January before the war began.

Shares sank 5.58% on the news, and United is hardly alone. In the past month, both Delta and Alaska Air yanked their full-year forecast entirely, causing shares to nosedive by 4.8% and 4.65%, respectively, this week.

Boeing’s comeback takes flight

But although airlines are stuck on the tarmac, one company making those planes is cleared for takeoff.

Boeing’s first-quarter earnings blasted past expectations, with sales soaring 14% year over year to $22.2 billion, buoyed by growth in its military aircraft and space systems. Its passenger jet business also rebounded by 10%, delivering 143 planes despite delays from wiring issues with the 737 MAX.

Overall, the aerospace giant posted a $7 million loss, but that’s actually an improvement over its $31 million deficit a year earlier. Basically, Boeing is still recuperating from strict production caps mandated by US regulators after quality-control failures led to two deadly 737 MAX crashes in 2018 and 2019. Now, though, “All systems are go,” according to Chief Executive Kelly Ortberg, who expects the company to turn profitable by the second half of the year.

Shares climbed 5.53% today.

The mile-high divide widens

So, what does this all mean for your vacation plans? That depends on where you fall on the financial spectrum.

The wealthiest 1% (who blow $12,400 per getaway, up 48% since 2022) can look forward to more pampering than ever. Meanwhile, the average traveler (who spends $3,700 per trip to squeeze into coach) may end up further pinched by higher ticket prices and fees on everything from checked baggage to seat selection.

Since high-end travelers gush cash, some airlines have expanded their “premium” section to 40% of the plane and doubled down on luxe upgrades to entice VIPs on board. Think: business-class seats that recline into beds, or full-on pods with sliding doors you can close for privacy as you sip your complimentary champagne.

Time to start saving up those airline miles for an upgrade.—JD