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Tag: Alaska Air Group Inc

  • Climate change is behind increasing flight turbulence, Transportation Sec’y Pete Buttigieg says

    Climate change is behind increasing flight turbulence, Transportation Sec’y Pete Buttigieg says

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    U.S. Secretary of Transportation Pete Buttigieg speaks during a press briefing the day after the collapse of the Francis Scott Key Bridge in Baltimore, at the White House in Washington, U.S., March 27, 2024. 

    Elizabeth Frantz | Reuters

    Transportation Secretary Pete Buttigieg says that climate change is one of the culprits behind an increase in flight turbulence.

    “The reality is, the effects of climate change are already upon us in terms of our transportation,” Buttigieg said on CBS’ “Face the Nation” on Sunday, forecasting that turbulence is something that will continue to “affect American travelers, whether here or abroad.”

    “We’ve seen that in the form of everything from heat waves that shouldn’t statistically even be possible threatening to melt the cables of transit systems in the Pacific Northwest, to, as you mentioned, hurricane seasons becoming more and more extreme and indications that turbulence is up by about 15%,” he continued. “That means assessing anything and everything that we can do about it.”

    A study published in the journal Geophysical Research Letters last year found that there have been increases in clear-air turbulence (CAT) between 1979 and 2020, with “severe-or-greater” turbulence – the strongest category of CAT – becoming 55% more frequent over the North Atlantic over the course of that time period.

    “Our climate is evolving,” Buttigieg said. “Our policies and our technology and our infrastructure have to evolve accordingly, too.”

    His comments come as turbulence has wreaked havoc on a number of flights so far this year.

    On Sunday, 12 people became injured after a Qatar Airways flight from Doha to Dublin was hit with turbulence while flying over Turkey. Six passengers and six crew members were injured, eight of whom were taken to the hospital after assessment, Dublin Airport said in a post on X.

    The aircraft landed just before 1:00 p.m. local time and was met by emergency services – including airport police and the fire and rescue department – upon landing, the airport said in a separate post on X.

    Severe turbulence also struck a Singapore Airlines flight last week, resulting in the death of one person and leaving 30 others injured.

    While Buttigieg called the deadly turbulence on the Singapore Airlines flight “very rare,” he added that “turbulence can happen and sometimes it can happen unexpectedly.”

    “Now, there are protocols and patterns for things like how pilots who encounter turbulence can notify those who might be coming in the path,” he said. “But I do think we need to continually re-evaluate that in the face of the reality that these things are more frequent and more severe than before.”

    ‘Err on the side of reporting’

    Boeing revealed on Friday that it’s seen a 500% increase in the number of employee submissions about quality and safety concerns during the first two months of 2024 compared to the same period a year ago.

    The aerospace giant noted that the rise in submissions occurred after a section of an Alaska Airlines 737 Max 9 plane blew out midflight on January 5. The company said this increase is “a sign of progress toward a robust reporting culture.”

    When asked about Boeing’s findings, Buttigieg backed up that claim, saying it’s “encouraging” to see that aviation employees are fostering a culture of “if you see something, say something.”

    “We want you to err on the side of reporting,” he said. “The concerning part, of course, is that any of those issues are happening at all.”

    Boeing leaders are set to meet with the Federal Aviation Administration on Thursday to present its plan on improving quality control. The agency announced in late February that it gave the company 90 days to develop the plan.

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  • CNBC Daily Open: Sticky inflation muddies water for Fed

    CNBC Daily Open: Sticky inflation muddies water for Fed

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    A man shops for fruit at a grocery store on February 01, 2023 in New York City.

    Leonardo Munoz | Corbis News | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Stocks rally
    Wall Street
    closed higher on Tuesday with the S&P 500 hitting a fresh record, up 1.1%. The blue-chip Dow gained over 200 points, while the Nasdaq added 1.5% as U.S. inflation data came in mildly higher than expected in February. 

    Record shareholder payouts
    Shareholder payouts hit a record $1.7 trillion last year, according to a new report by British asset manager Janus Henderson. Nearly half of the world’s total dividend growth came from the banking sector, which delivered record payouts as rising borrowing costs lifted lenders’ margins, the report found. 

    Boeing crisis hurt airlines
    CEOs from several airlines say Boeing’s delivery delays have forced the carriers to change their growth plans. Boeing’s crisis has deepened since a door plug blew out midflight from an Alaska Airlines Max 9 in January. Southwest Airlines, Alaska Airlines and United, are some of the top buyers of Boeing’s aircraft that have been impacted by its problems.

    Citadel on rate cuts
    Inflation tailwinds remain and the Fed shouldn’t cut rates too quickly, says Citadel founder and CEO Ken Griffin. “If I’m them, I don’t want to cut too quickly,” he noted, adding that it will be “more devastating” if they have to change direction after initially cutting rates. “I think they are going to be a bit slower than what people were expecting two months ago in cutting rates.”

    [PRO] Buy or sell Nivida?
    Nvidia’s stock has surged over 200% in 2023 alone, powered by the global AI frenzy. Is it time to take profit or should investors stay the course? Experts who currently hold the chip giant’s stock share their insights.   

     

    The bottom line

    Once again, inflation came in hot for a second straight month.   

    February’s consumer prices data was a touch better than January’s troubling inflation print. 

    Still, core inflation — which excludes food and energy — was stronger than expected, up 0.4% last month, which reflects lingering stickiness in price pressures.

    Investors don’t expect that latest data to move the needle on the Fed cutting rates in June. That could be why markets have had a more muted reaction to the news.

    “We have the numbers we have and this wasn’t great news for the Fed but markets don’t see it as a big threat to rate cuts later in the year,” Kathy Jones, chief fixed income strategist at Charles Schwab, said on X.

    Yet, the hot print poses a problem for the Fed and muddies the water for its deliberations on the coming rate cuts.

    “The long-term disinflation trajectory probably has not changed, but the path to the Federal Reserve’s 2% target will be choppy,” noted LPL Financial chief economist Jeffrey Roach. “Expect to see markets struggle with what this means for Fed policy.”

    There is a lot riding for Wall Street when the central bank meets next week. Investors’ main focus will be on whether the Fed will continue to pencil in three rates for this year or will officials decide to change course.

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  • United Airlines raises checked bag fee $5, following American

    United Airlines raises checked bag fee $5, following American

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    United Airlines planes at Denver International Airport.

    Leslie Josephs | CNBC

    United Airlines is raising the price to check bags, becoming the latest carrier this year to hike a fee that generated more than $5 billion for airlines in the first nine months of 2023 alone.

    United economy passengers who book domestic tickets starting Feb. 24 will pay $40 for a first checked bag, or $35 if they prepay online at least 24 hours before their flight, an increase of $5. A second checked bag will cost $50 at the airport, or $45 in advance, up $5 for both options.

    The changes apply to most flights throughout North America, a United spokeswoman said.

    In 2020, United raised the price to check a bag at the airport by $5 to $35 but kept it steady at $30 if travelers paid for the service in advance.

    Certain credit card holders, frequent flyers with elite status, active military and travelers in top-tier classes can still check a bag for free, United said.

    Earlier this week, American Airlines raised its fee to check a first bag on domestic flights to $35 if purchased in advance and $40 at the airport. Both options were previously $30. A second checked bag will go up from $40 to $45.

    Airlines and other companies have been grappling with how to grow profits while reining in costs, such as new labor contracts, while pricing power has waned.

    JetBlue and Alaska Airlines have also raised bag fees this year.

    Don’t miss these stories from CNBC PRO:

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  • CNBC Daily Open: Wall Street rattled over Fed worries

    CNBC Daily Open: Wall Street rattled over Fed worries

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    A trader works, as a screen displays a news conference by Federal Reserve Board Chairman Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 31, 2024. 

    Brendan McDermid | Reuters

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Wall Street retreats
    U.S. stocks
    lost ground on Monday and Treasury yields rose amid lingering concerns that the Federal Reserve may not cut rates as much as expected. The blue-chip Dow fell over 200 points. The S&P 500 also slumped after hitting a record high last week. The Nasdaq Composite also dropped 0.2%. 

    Oil’s supply crunch
    The oil market faces a supply crunch by the end of 2025 as the world is not replacing crude reserves fast enough, according to Occidental CEO Vicki Hollub. About 97% of the oil produced today was discovered in the 20th century, she told CNBC. 

    Palantir surges
    Shares of Palantir spiked 19% in extended trading after the company reported revenue that topped analysts’ estimates. In a letter to shareholders, Palantir CEO Alex Karp said demand for large language models in the U.S. “continues to be unrelenting.”

    Red Sea tensions
    Higher shipping costs due to tensions in the Red Sea could hinder the global fight against inflation, said the Organisation for Economic Co-operation and Development. Clare Lombardelli, chief economist at the OECD, told CNBC that shipping-driven inflation pressures remain a risk rather than its base case.

    [PRO] Banking allure
    The banking sector offers attractive opportunities despite an increase in volatility, according to fund manager Cole Smead. “It’s the banks that made bad decisions that are making [other] banks look attractive in pricing,” Smead told CNBC, who picked two bank stocks that are in play. 

    The bottom line

    Investors are once again getting ahead of themselves on the Fed’s next move.

    Markets were rattled after Federal Reserve Chair Jerome Powell reiterated the central bank is unlikely to rush to lower interest rates. 

    Wall Street has been parsing his hawkish comments, yet in essence what Powell said over the weekend was no different than what he shared at Wednesday’s press conference: that he wants to see more evidence that inflation is coming down to a sustainable level.

    Still, the debate over the timing of rate cuts unsettled Fed watchers.  

    This sparked a sell-off spurred by higher bond yields. The yield on the 10-year Treasury spiked for a second day, trading around 4.163%. Typically, higher yields tend to indicate investors think the Fed will take longer to cut rates. 

    Fresh data out Monday also didn’t help.  A new survey showed the U.S. services sector expand at a faster-than-expected clip in January. 

    This on top of the booming jobs report released Friday, fueled investor worries that rates may stay elevated for much longer.

    Wall Street will now look ahead to the swath of Fed speakers this week. Perhaps they will shed more light on the path for rate cuts.

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  • Flight cancellations pile up as winter storm, 737 Max 9 grounding disrupt travel

    Flight cancellations pile up as winter storm, 737 Max 9 grounding disrupt travel

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    An Embraer E175LR passengers aircraft of American Eagles airlines (C) taxxing before take-off to Pittsburg is seen at La Guardia Airport on January 9, 2024.

    Charly Triballeau | Afp | Getty Images

    Airlines canceled about 2,000 U.S. flights Friday as they grapple with winter weather and the grounding of Boeing 737 Max 9 planes. 

    Storms in the Midwest helped drive more than 4,500 delays, with major disruptions around Chicago and Detroit, major hubs for the largest U.S. carriers, according to flight-tracker FlightAware.

    About 40% of flights at Chicago’s O’Hare International Airport, a hub for United Airlines and American Airlines, were canceled after a snowstorm led to an over two-hour ground stop. Detroit Metropolitan Wayne County Airport, a hub for Delta Air Lines, had about 20% of flights Friday either delayed or canceled due to the storms.

    Southwest Airlines, which has a big operation out of Chicago Midway, canceled more than 400 flights, while more than 900 were delayed.

    United canceled about 10% of its mainline flights and delayed about 20%.

    Last week, the Federal Aviation Administration grounded Boeing 737 Max 9s after a door plug blew off an Alaska Airlines flight, so the jets can undergo inspections. That grounding has continued to disrupt travel for both United and Alaska Airlines, the only two U.S. airlines that operate the aircraft.

    Alaska Airlines said Friday it would cancel all flights on the Max 9 through Sunday as it waits for documentation from Boeing and the FAA to begin inspections.

    About 20% of the carrier’s flights were canceled Friday and more than 10% were delayed, FlightAware data showed. Alaska said that between 110 and 150 flights per day would be impacted by the grounding of the Max 9. 

    “We regret the significant disruption that has been caused for our guests by cancellations due to these aircraft being out of service,” the company said.

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  • Boeing’s financials won’t be hurt by latest 737 Max issues, analysts say. The company’s size is one reason.

    Boeing’s financials won’t be hurt by latest 737 Max issues, analysts say. The company’s size is one reason.

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    Alaska Airlines, United Airlines and Turkish Airlines have all grounded their Boeing 737 Max 9 airplanes after part of one such jet tore away during an Alaska Airlines flight on Friday. But despite the potential safety risks for travelers and further damage to Boeing’s
    BA,
    -8.03%

    reputation, some Wall Street analysts, for now, have downplayed the financial impact for the jet maker.

    In part, they pointed to the company’s status as one of two major players in aircraft production — the other being Airbus
    EADSY,
    +3.52%
    .
    They also cited a tighter supply of available aircraft and limited near-term impact, at least while investigators try to figure out the cause of the incident.

    Those airlines and others took the action over the weekend after a panel on a jet blew out about 10 minutes into Alaska Airlines Flight 1282 at an altitude of about 16,000 feet.

    No one died in the incident. But the Federal Aviation Administration ordered the temporary grounding of certain Boeing 737 Max 9 aircraft. The order covered 171 planes.

    Shares of Boeing fell 8.2% as the stock weighed on the Dow Jones Industrial Average
    DJIA.

    Still, some Wall Street analysts on Monday said to buy the stock anyway. They said the latest difficulties with the aircraft — which follow the 2019 grounding of Max jets by many nations following two fatal crashes — were unlikely to have a big near-term financial impact.

    BofA analysts, in a research note dated Sunday, said that “at this point in time, due to the duopoly nature of the industry, we do not see this impacting orders for any of the 737 MAX variants. However, if the hits to the program do keep coming … at some point, the flying public may lose confidence in the 737 MAX which could ultimately impact sales.”

    The analysts said it wasn’t clear yet whether the blowout on Friday was due to an assembly mistake at Boeing, an improper installation from fuselage maker Spirit AeroSystems or oversight issues elsewhere. But they noted that the aircraft was relatively new, having been delivered on Oct. 31. And they said that “some scrutiny must be saved for regulators as well, as the FAA is ultimately responsible for certificating these aircraft before delivery.”

    Spirit AeroSystems’ stock
    SPR,
    -11.13%

    was down 11%.

    Analysts at William Blair also said they didn’t expect a big hit to Boeing’s financials.

    “While the Alaska Airlines door plug accident was terrifying, we do not believe that it will have a major financial impact, unless another incident occurs after the aircraft returns to service,” they said in a note on Monday.

    Analysts there estimated that over the past two months, the Max 9 made up less than one-fifth of Boeing’s total deliveries. They said those deliveries would only be “modestly impacted over the first quarter as it could take some time to determine the cause.”

    Of the 23 analyst ratings on Boeing’s stock tracked by FactSet, 18 are buy ratings or the equivalent.

    Read more: How Boeing’s latest 737 Max problem is hurting the Dow

    However, Morgan Stanley analyst Ravi Shanker said the 737 Max 9 issues will likely disrupt first-quarter results for United Airlines
    UAL,
    +2.78%

    and Alaska Air
    ALK,
    -0.21%
    .

    “This will hopefully be a situation resolved in days/weeks rather than months, but it will also serve as a reminder of how fragile airline capacity can be despite the overhang of capacity,” Shanker said in a Monday research note.

    United Airlines’ stock rose 2.4% on Monday, while Alaska Air’s dipped by 0.3%.

    Along with United Airlines, Alaska Airlines and Turkish Airlines, Copa Airlines and Aeromexico grounded about 40 Boeing 737 Max 9 planes, according to reports.

    According to Deutsche Bank analysts, the affected fleet accounts for 16.1% of Alaska Airlines flights and 6.6% of United flights, although United has more 737 Max 9 aircraft than Alaska.

    Other airlines with the plane in their fleet include Jet Airways of India with one plane, Jin Air of Korea with three, KLM Royal Dutch Airlines
    KLMR,

    with five and Korean Air Lines
    003490,
    -1.52%

    with nine, according to Planespotter.net.

    European regulators also grounded the 737 Max 9 for inspection.

    Some major airlines do not have any 737 Max 9s in their fleets, including American Airlines
    AAL,
    +7.21%
    ,
    Southwest Airlines
    LUV,
    -0.10%

    and Air Canada
    AC,
    +3.42%
    ,
    according to reports.

    Also read: Shares in Boeing slump, supplier Spirit AeroSystems tanks, after panel blows out

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  • United Airlines to ground Boeing 737 Max 9 planes after panel blew off Alaska Air flight

    United Airlines to ground Boeing 737 Max 9 planes after panel blew off Alaska Air flight

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    A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.

    Justin Sullivan | Getty Images

    United Airlines is preparing to ground dozens of its Boeing 737 Max 9 aircraft for inspections, a day after a panel blew out of an Alaska Airlines flight, according to a person familiar with the matter.

    The announcement to ground the planes could come as early as Saturday, the person said. Alaska Airlines announced it would ground its Max 9 fleet after the incident on Friday.

    No serious injuries were reported aboard Alaska Airlines Flight 1282, according to federal safety officials. The plane returned to Portland shortly after takeoff on Friday after a pressurization issue was reported. Boeing delivered the planes late last year.

    The Federal Aviation Administration didn’t immediately comment.

    This is breaking news. Please check back for updates.

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  • Alaska Airlines grounds Boeing 737 Max 9 fleet after section blows out midair

    Alaska Airlines grounds Boeing 737 Max 9 fleet after section blows out midair

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    An Alaska Airlines plane takes off from Los Angeles International Airport (LAX) on December 4, 2023 in Los Angeles, California. 

    Mario Tama | Getty Images News | Getty Images

    Alaska Airlines will temporarily ground its fleet of 65 Boeing 737 Max 9 planes after a section of the plane blew out midflight on Friday, forcing the crew to make an emergency landing.

    “Each aircraft will be returned to service only after completion of full maintenance and safety inspections,” CEO Ben Minicucci said. “We anticipate all inspections will be completed in the next few days.”

    Alaska Airlines Flight 1282 was heading to Ontario, California from Portland, Oregon, when it returned shortly after departure with 171 passengers and six crew aboard, the airline said.

    Images and video of the new Boeing 737 Max 9 shared on social media showed a gaping hole on the side of the plane and passengers using oxygen masks. It landed back in Portland at 5:26 p.m. local time, according to Flightradar24. It had reached an altitude of 16,325 feet before returning to Portland.

    The National Transportation Safety Board said “no serious injuries” were reported. It is sending a team to Portland to investigate, arriving later on Saturday. The Federal Aviation Administration also said it plans to investigate.

    “While this type of occurrence is rare, our flight crew was trained and prepared to safely manage the situation,” Alaska said.

    The plane was certified in November, according to flight-tracking site FlightAware.

    ‘Explosive decompression’

    Boeing also said it was aware of the incident but declined to comment further.

    “We are working to gather more information and are in contact with our airline customer,” it said in a statement. “A Boeing technical team stands ready to support the investigation.”

    The incident was described as “an explosive decompression at the window exit,” said Sara Nelson, president of the Association of Flight Attendants-CWA, the labor union that represents Alaska’s cabin crew and flight attendants at United, Spirit and other carriers.

    “Our Union strongly believes this decision [to ground the Max 9 fleet] is a prudent and necessary step toward ensuring the safety of all crew and passengers,” she said in a statement. “We will closely monitor the safety inspection process to ensure that aircraft are not returned to service until they are deemed safe for all.”

    ‘Plugged’ exit door

    The Boeing 737 Max 9 has a cabin exit door behind the wings for use in dense seating cabin configurations, like those used by budget airlines, according to Flightradar24.

    “The doors are not activated on Alaska Airlines aircraft and are permanently ‘plugged,’” Flightradar23 said.

    The airline didn’t immediately respond to a comment about the door and Boeing declined to comment beyond its statement.

    United Airlines, which also has 737 Max 9 in its fleet, didn’t immediately comment.

    There are 215 Boeing 737 Max 9 planes in service worldwide, according to aviation-data firm Cirium, and Alaska had completed 5,024 flights with the aircraft before Friday’s incident.

    The Boeing 737 Max 9 is a larger version of Boeing’s best-selling jetliner, the 737 Max 8. Max planes were grounded worldwide in 2019 after two fatal crashes within five months. The U.S. lifted its flight ban of the jets in late 2020 after software and training updates.

    Late last year, Boeing urged airlines to inspect aircraft for a “possible” loose bolt in the rudder control system, the latest in a series of manufacturing flaws on the planes that have prompted additional inspections.

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  • Alaska Airlines grounds all Boeing 737-9 Max planes after flight suffers midair window blowout

    Alaska Airlines grounds all Boeing 737-9 Max planes after flight suffers midair window blowout

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    Alaska Airlines grounded all of its Boeing 737-9 aircraft late Friday, hours after a window and piece of fuselage on one such plane blew out in midair and forced an emergency landing in Portland, Oregon.

    The incident occurred shortly after takeoff and the gaping hole caused the cabin to depressurize. Flight data showed the plane climbed to 16,000 feet (4,876 meters) before returning to Portland International Airport.

    The airline
    ALK,
    +3.10%

    said the plane landed safely with 174 passengers and six crew members.

    “Following tonight’s event on Flight 1282, we have decided to take the precautionary step of temporarily grounding our fleet of 65 Boeing 737-9 aircraft,” Alaska Airlines CEO Ben Minicucci said in a statement.

    Each of the aircraft will be returned to service after full maintenance and safety inspections, which Minicucci said the airline anticipated completing within days.

    The airline provided no immediate information about whether anyone was injured or the possible cause.

    The plane was diverted about about six minutes after taking off at 5:07 p.m., according to flight tracking data from the FlightAware website. It landed at 5:26 p.m.

    The pilot told Portland air traffic controllers the plane had an emergency, was depressurized and needed to return to the airport, according to a recording made by the website LiveATC.net.

    A passenger sent KATU-TV in Portland a photo showing the hole in the side of the airplane next to passenger seats. Video shared with the station showed people wearing oxygen masks and passengers clapping as the plane landed.

    The National Transportation Safety Board said in a post on X, formerly known as Twitter, that it was investigating an event on the flight and would post updates when they are available. The Federal Aviation Administration also said it would investigate.

    The Boeing 737-9 MAX involved in the incident rolled off the assembly line and received its certification just two months ago, according to online FAA records.

    The plane had been on 145 flights since entering commercial service on Nov. 11, said FlightRadar24, another tracking service. The flight from Portland was the aircraft’s third of the day.

    Boeing
    BA,
    +1.66%

    said it was aware of the incident, working to gather more information and ready to support the investigation.

    The Max is the newest version of Boeing’s venerable 737, a twin-engine, single-aisle plane frequently used on U.S. domestic flights. The plane went into service in May 2017.

    Two Max 8 jets crashed in 2018 and 2019, killing 346 people and leading to a near two-year worldwide grounding of all Max 8 and Max 9 planes.

    The planes returned to service only after Boeing made changes to an automated flight control system implicated in the crashes.

    Last year, the FAA told pilots to limit use of an anti-ice system on the Max in dry conditions because of concern that inlets around the engines could overheat and break away, possibly striking the plane.

    Max deliveries have been interrupted at times to fix manufacturing flaws. The company told airlines in December to inspect the planes for a possible loose bolt in the rudder-control system.

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  • Stocks making the biggest moves premarket: Uber, Coinbase, Spotify, Alaska Air and more

    Stocks making the biggest moves premarket: Uber, Coinbase, Spotify, Alaska Air and more

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  • CNBC Daily Open: 'Premature' to talk about cutting rates?

    CNBC Daily Open: 'Premature' to talk about cutting rates?

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    U.S. Federal Reserve Board Chairman Jerome Powell participates in a panel discussion at the 24th Jacques Polak Annual Research Conference on November 8, 2023 in Washington, DC.

    Alex Wong | Getty Images News | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Fed Chair Powell says too ‘premature’ to cut rates
    Federal Reserve Chairman 
    Jerome Powell said Friday it was too early to declare victory over inflation and beat back on market views for interest rate cuts next year. “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,” Powell said in prepared remarks. Markets perceived his comments as dovish, sending stocks higher and Treasury yields sharply lower.

    S&P 500 soars to 2023 high  
    The S&P 500 rose 0.59% Friday and closed at a new high for 2023, extending a strong rally from November. The Nasdaq Composite ended 0.55% higher, while the Dow Jones Industrial Average added 0.82%. The benchmark index closed at its highest level since March 2022 as investors were hopeful that that the Fed might be done with raising interest rates. Europe’s Stoxx 600 closed 1% higher Friday after finishing its best month since January.

    A $1.9 billion regional airlines deal
    Alaska Airlines has agreed to buy rival Hawaiian Airlines in a $1.9 billion deal as the carriers make a push to expand along the West Coast. Alaska would pay $18 a share for Hawaiian and would take on $900 million of its debt, the companies said Sunday. The deal could also draw another potential regulatory battle in the second proposed airline merger in less than two years.

    Uber gets a spot in the S&P 500
    Uber will be added to the S&P 500 Index, replacing Sealed Air Corp. The change will take place prior to the open of trading on Dec. 18. The ride-hailing company made its delivery business profitable faster than expected, while growth in advertising revenue has also contributed to Uber’s profitability.

    [PRO] China’s version of Spotify is ‘underappreciated,’ Morgan Stanley says

    Tencent Music Entertainment “music value [is] still underappreciated,” Morgan Stanley says even as the company is convincing more people in China to pay for music. The company’s online music subscribers topped 100 million in the July-to-September period, for the first time since it listed in the U.S. in late 2018.

    The bottom line

    Wall Street is off to a solid start this December, with the major averages recording their fifth straight week of gains on Friday.

    This comes on the back of November's spectacular rally which saw markets snapping a three-month losing streak, driven by bets that the Fed may just be done with raising rates and could even start cutting them as soon as the first half of next year.

    There was, however, pushback from Fed Chair Jerome Powell, calling the talks of cuts "premature". But stock markets took heart from what traders perceived as a clearly dovish message from the central bank chief.

    "There's a trifecta of drivers here. The first is the inflation. Second is the Fed seeming like it may be stepping to the sidelines, and the third is this cooling in the economy that is starting to unfold, but at a very gradual pace," said Mona Mahajan, senior investment strategist at Edward Jones.

    "It's almost like a Goldilocks cooling. It's not too hot. It's not too cold. And that's exactly what markets are embracing."

    Powell's remarks cemented views that the Fed is at least done raising rates. Powell also noted that inflation was "moving in the right direction."

    Fed's meeting on Dec. 13 will help clear the air on its interest-rate plans.

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  • What we know about the off-duty Alaska Airlines pilot accused of trying to shut off a plane’s engines mid-flight | CNN

    What we know about the off-duty Alaska Airlines pilot accused of trying to shut off a plane’s engines mid-flight | CNN

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    CNN
     — 

    An off-duty pilot who was riding in the cockpit of an Alaska Airlines flight en route to San Francisco on Sunday is facing dozens of attempted murder charges after he tried to shut down the plane’s engines mid-flight, authorities say.

    The suspect, identified as Alaska Airlines pilot Joseph D. Emerson, 44, attempted to cut off fuel to the engines but the quick action of the aircraft’s captain and first officer kept the engines from failing completely, the airline said, adding Emerson was subdued by the flight crew.

    The flight was forced to divert to Portland, Oregon, where the suspect was taken into custody by the Port of Portland police, the port said in a statement.

    Emerson has been charged in Oregon with 83 felony counts of attempted murder, 83 counts of reckless endangerment and one count of endangering an aircraft, booking records show.

    Authorities do not believe the incident was an act of terrorism or ideologically motivated violence, a law enforcement source familiar with the investigation told CNN’s Josh Campbell. The source noted the suspect may face additional federal charges.

    Here’s what we know.

    After taking off from Everett, Washington, on Sunday, Alaska Airlines Flight 2059 – operated by regional carrier Horizon Air – reported a “security threat related to an off-duty Alaskan Airlines pilot, identified as Captain Joseph Emerson, who was traveling in the flight deck jump seat,” the airline said in a statement.

    Pilots will sometimes ride in a cockpit “jump seat” when traveling in their official capacity or commuting between airports.

    While in the cockpit, Emerson had tried to shut down both of the Embraer 175’s engines by pulling its fire extinguisher handles, the airline said.

    “The fire suppression system consists of a T-handle for each engine; when pulled, a valve in the wing closes to shut off fuel to the engine,” Alaska Airlines said in a statement to CNN. “After they are pulled, some residual fuel remains in the line.”

    The airline said the quick reaction of the crew to reset both handles helped restore the flow of fuel and prevent the engines from cutting out.

    “Our crew responded without hesitation to a difficult and highly unusual situation, and we are incredibly proud and grateful for their skillful actions,” the airline said in a statement.

    The plane was at cruise altitude when the incident occurred, Capt. Mike Karn, senior manager of flight security for American Airlines, said in a memo circulated at his airline.

    The flight crew detained the suspect and the plane was diverted to Portland International Airport, the Port of Portland said in a statement.

    “I think he’s subdued,” one of the plane’s pilots can be heard saying in air traffic control audio recorded by LiveATC.net. “Other than that, we want law enforcement as soon as we get on the ground and are parked.”

    Once the flight landed in Portland around 6:30 p.m., the suspect was taken into custody by Port of Portland police officers, the port said.

    No injuries were reported on the flight, the FBI said.

    All passengers were later able to fly to San Francisco with a new crew and aircraft, the airline said, noting it is “reaching out to each of them individually to discuss their experience and check-in on their well-being.”

    Emerson has been detained at the Multnomah County Detention Center as both the FBI and the Port of Portland police investigate the incident, authorities said.

    The FBI’s Portland field office confirmed its investigation in a statement Monday and assured travelers there is “no continuing threat related to this incident.”

    The Federal Aviation Administration also said it is supporting local law enforcement in the investigation.

    The FAA said it has briefed other airlines on preliminary details of the incident and informed carriers the incident is not related to “current world events” – apparently referring to the war in the Middle East between Israel and Hamas.

    Passengers describe their emergency landing

    Two passengers on the flight told CNN that the airline crew maintained a calm environment on the plane as the incident played out.

    Aubrey Gavello, one of the passengers, said she didn’t realize something was wrong until a flight attendant announced over the loudspeaker that the plane needed to land immediately.

    “We didn’t know where we were landing and we didn’t know what was wrong. But (the flight attendant) assured us we were safe,” Gavello said on “Laura Coates Live” Monday night.

    Later, the pilot informed passengers through the loudspeaker that there had been a “disturbance in the cockpit,” said Alex Wood, who was seated at the front of the plane. Wood said he was wearing headphones and slept through the incident.

    “I was right by the cockpit, but nothing woke me up. Nothing was loud enough, nothing was rambunctious enough to wake me up,” Wood said.

    After the plane landed, about five police officers boarded the plane and escorted the suspect off the aircraft, Gavello recalled. She noted the suspect was calm and cooperative and had his hands secured by zip ties.

    “Props to the Alaska crew for keeping everyone calm,” Gavello said.

    “It was all handled super well,” said Wood.

    The pair said they didn’t realize the gravity of the situation Monday, when they woke to news headlines about the suspect trying to shut down the plane engines.

    “I’m honestly grateful that we didn’t know anything when they rebooked us and got us on a second plane,” Gavello said. “I don’t know if I would have felt comfortable doing that if we had all the information.”

    Emerson’s neighbor, Ed Yee, told CNN it was “very shocking” to hear of the suspect’s alleged actions.

    “He seems like a really nice guy. Nothing abnormal about him,” Yee said.

    Emerson has worked in aviation for at least two decades, according to information shared by Alaskan Airlines.

    He first joined the Alaska Air Group in 2001 as a first officer with Horizon. In 2012, Emerson left Horizon and joined Virgin America as a pilot.

    After Alaska Airlines acquired Virgin America in 2016, Emerson became a first officer with Alaska and worked about three more years to become a pilot for the airline, according to the airline statement.

    “Throughout his career, Emerson completed his mandated FAA medical certifications in accordance with regulatory requirements, and at no point were his certifications denied, suspended or revoked,” Alaska Airlines said in a statement.

    FAA records show Emerson held an Airline Transport Pilot certification with ratings to fly the Airbus A320, Boeing 737, Canadair Regional Jet, and De Havilland Dash 8. He did not hold a certification to fly the ERJ 175, those records indicate, the type of airplane in use during Sunday’s incident.

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  • More companies, especially airlines, warn higher costs will eat into profits

    More companies, especially airlines, warn higher costs will eat into profits

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    An American Airlines 787 is loaded with cargo at Philadelphia International Airport.

    Leslie Josephs/CNBC

    More companies are warning that a surge in the cost of fuel and employee pay hikes will eat into profits this quarter.

    Companies from aerospace manufacturers to package delivery giant UPS are digesting big new labor deals. Meanwhile, unions from the auto industry to Hollywood are pushing for better compensation. Airlines, whose biggest expenses are jet fuel and labor, are getting hit particularly hard.

    Delta Air Lines on Thursday cut its adjusted earnings forecast for the third quarter to between $1.85 and $2.05 a share, down from an earlier forecast of $2.20 to $2.50. Delta said it is paying more for fuel than it expected but said maintenance costs were also more than it anticipated.

    U.S. jet fuel at major airports averaged $3.42 a gallon as of Tuesday, up 38% from two months ago, according to Airlines for America, an industry group.

    On Wednesday, American Airlines trimmed its earnings forecast, following revisions at Alaska Airlines and Southwest Airlines. American expects to adjusted earnings per share of between 20 cents and 30 cents in the third quarter, down from a previous forecast of as much as 95 cents a share, citing more expensive fuel and a new pilot labor deal.

    The company expects to recognize a $230 million expense for that new contract, which includes immediate 21% raises for pilots, and compensation increasing more than 46% over the duration of the four-year contract, including 401(k) contributions.

    Elsewhere, labor unions from Detroit to Hollywood have pushed hard for raises, better benefits and schedules in new contracts. UPS and the Teamsters union representing about 340,000 workers at the package carrier in July reached a new labor deal that includes raises for both full- and part-time workers, and narrowly avoided a potential strike.

    UPS workers ratified the agreement ratified last month. By the end of the five-year contract, a driver could make $170,000 in pay and benefits, the company said.

    Earlier this week, the delivery giant outlined the costs associated with the deal and said it the expenses from it will increase at 3.3% compound annual growth rate over the next five years.

    “Year one costs more than we originally forecast,” said Brian Newman, the company’s CFO, said on an investor call this week. He said it will cost $500 million more in the back half of 2023 than expected, he said.

    As of midday Thursday, the United Auto Workers and Detroit automakers appeared far apart on labor talks for new labor deals, setting up “likely” strategic strikes at the companies after an 11:59 p.m. ET Thursday deadline, UAW President Shawn Fain said Wednesday night. The union has sought more than 30% hourly pay increases, a reduced 32-hour work week, and other improvements.

    Other unions are also seeking higher compensation. The Hollywood writers and actors strikes began in May and mid-July, respectively, with members demanding better pay to match changing industry dynamics in the entertainment-streaming era.

    American Airlines offered flight attendants 11% pay increases the date a new contract starts, and 2% raises after that. But the Association of Professional Flight Attendants said the union wants 35% increases at the start of a new deal, followed by 6% annual raises.

    Unions have complained that workers didn’t get raises during high inflation in recent years since the Covid pandemic derailed talks.

    Strong travel demand has helped the largest carriers more than cover their higher expenses. But some carriers are seeking cracks in sales just as a slower travel period after summer begins. Spirit Airlines on Wednesday said it expects a deeper loss than previously forecast and lower revenue.

    Frontier Airlines warned Wednesday that “in recent weeks, sales have been trending below historical seasonality patterns,” and forecast an adjusted loss for the quarter.

    – CNBC’s Michael Wayland and Gabriel Cortes contributed to this article.

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  • Stocks making the biggest moves before the bell: General Motors, 3M, Spotify, Verizon and more

    Stocks making the biggest moves before the bell: General Motors, 3M, Spotify, Verizon and more

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    Maplewood, Minnesota, 3M company global headquarters. 

    Michael Siluk | Universal Images Group | Getty Images

    Check out the companies making headlines in premarket trading.

    General Motors — Shares of General Motors rose more than 1% after the automaker raised its full-year guidance and reported second-quarter results that rose on a year-over-year basis.

    related investing news

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    3M – Shares of the chemical manufacturer rose about 2% in premarket trading following the company’s latest earnings report. 3M posted $7.99 billion in revenue, beating analysts’ estimates of $7.87 billion, according to Refinitiv. The company also raised its full-year earnings guidance and reaffirmed its revenue guidance.

    Xerox — The workplace technology provider advanced 3.6% after beating earnings expectations for the second quarter, posting 44 cents per share excluding items against a 32-cent forecast from analysts polled by FactSet. Quarterly revenue came in line with expectations at $1.75 billion. Xerox also said to expect free cash flow and the adjusted operating margin to be better than previously anticipated for the full year.

    General Electric — Shares of the industrial giant jumped more than 4% in premarket trading after the company posted stronger-than-expected earnings for the second quarter. GE also boosted its full-year profit guidance on the back of strong demand from aerospace and record orders in its renewable energy business.

    Danaher — Shares of the conglomerate slid 4.6%. Danaher said non-GAAP core revenue in the base business will be down in the current quarter compared with the same quarter a year ago and would be up less than previously expected for the full year. However, the company gave a strong quarterly report, posting second quarter earnings per share excluding items at $2.05 and revenue at $7.16 billion, while analysts polled by FactSet anticipated $2.01 per share on $7.12 billion in revenue.

    Spotify — The music streaming platform dropped 6.1% after presenting a weak quarterly report and guidance. Spotify reported revenue of €3.18 billion, below a Refinitiv forecast of €3.21 billion. Full-year revenue guidance was also worse than analysts expected. The report follows Spotify’s announcement that it will raise prices for premium subscription plans.

    Lilium — The electric helicopter stock added 5.6% after management released a letter to shareholders. In the letter, management said adjusted cash spend for the first half of 2023 was within budget and the company was successful in an audit from the European Union Aviation Safety Agency.

    Alaska Air — Shares of the airline fell more than 4% even after Alaska beat estimates on the top and bottom lines for the second quarter. Alaska reported $3 in adjusted earnings per share on $2.84 billion in revenue. Analysts surveyed by Refinitiv were expecting $2.70 in earnings per share on $2.77 billion in revenue. The airline’s full-year earnings guidance of $5.50 to $7.50 per share was roughly in-line with the average analyst estimates of $6.65, according to FactSet.

    RTX — Shares of the company formerly known as Raytheon slipped 3% despite a strong quarterly report. RTX ported $1.29 in earnings per share, excluding items, on $18.32 billion in revenue. Analysts polled by Refinitiv forecasted $1.18 per share and $17.68 billion. The company also raised its full-year expectations for both lines.

    Verizon — The telecommunications giant traded 2.6% higher after reaffirming its full-year guidance. That came despite a mixed second quarter, with Verizon posting $1.21 in earnings per share, excluding items, on $32.6 billion in revenue. Analysts polled by Refinitiv estimated $1.17 earnings per share and revenue of $33.24 billion.

    Walmart — Walmart rose more than 1% after Piper Sandler upgraded the big-box retailer Monday to overweight from neutral, and hiked its price target. Analyst Edward Yruma said Walmart could take greater market share in the grocery business as inflation eases.

    — CNBC’s Samantha Subin, Yun Li, Jesse Pound, Sarah Min and Tanaya Macheel contributed reporting

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  • Wall Street’s most overbought stocks include PepsiCo and this little-known insurance company

    Wall Street’s most overbought stocks include PepsiCo and this little-known insurance company

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  • CFRA says Southwest Airlines remains a strong buy, despite recent turmoil for travelers

    CFRA says Southwest Airlines remains a strong buy, despite recent turmoil for travelers

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  • Southwest cancels 60% of flights while air travel disruptions ease elsewhere

    Southwest cancels 60% of flights while air travel disruptions ease elsewhere

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    Aircraft are deiced at General Mitchell International Airport in Milwaukee

    Reuters

    Flight cancellations eased further on Monday but disruptions from severe winter weather across the U.S. lingered, particularly for Southwest Airlines, at the tail end of Christmas weekend.

    Airlines have canceled more than 17,000 U.S. flights since Wednesday, according to FlightAware, as storms brought snow, ice, high winds and bitter cold around the country, derailing air travel from coast to coast. Those conditions slowed down ground crews as they faced severe conditions at airports.

    Carriers are likely to detail the costs of the disruptions when they report results next month, if not earlier.

    Southwest Airlines was hit particularly hard by winter weather over the holiday travel period, along with other issues including unexpected fog in San Diego and staffing shortages at a fuel vendor in Denver, the carrier’s chief operating officer told staff.

    Delta Air Lines, American Airlines, United Airlines, JetBlue Airways and Alaska Airlines were among the carriers affected by the weather that hit last week but had a smaller share of cancellations on Monday.

    Southwest had been canceling many flights proactively in an effort to stabilize its operation, COO Andrew Watterson said. From Wednesday through Saturday, about a quarter of Southwest’s flights were canceled, and two-thirds were delayed, according to FlightAware data.

    The airline apologized to employees for the chaos, which left many struggling to get a hold of crew scheduling services, making it harder to get reassignments or make other changes, or get hotel rooms. Southwest also offered flight attendants working over the holiday extra pay.

    “Part of what we’re suffering is a lack of tools,” Southwest CEO Bob Jordan said in a message to staff on Sunday. “We’ve talked an awful lot about modernizing the operation, and the need to do that. And Crew Scheduling is one of the places that we need to invest in. We need to be able to produce solutions faster.”

    Some pilots were forced to sleep at airports because they were unable to find hotel rooms, said Casey Murray, president of Southwest Airlines Pilots Association, the pilots’ union.

    Southwest’s problems continued on Monday while other carriers stabilized. The carrier had canceled more than 2,300 flights, 58% of its schedule, and 820 more were delayed. Delta had canceled 8% of its mainline flights on Monday, United 5% and American less than 1% with 12 flights scrubbed.

    More than 3,200 U.S. flights were canceled on Monday, and close to 5,000 were delayed.

    Airlines often cancel flights proactively during bad weather to avoid having planes, crews and customers out of place, problems that can make recovery from a storm more difficult.

    Carriers also planned smaller schedules for Christmas Eve and Christmas Day compared with the days leading up to the holidays, making it harder for them to rebook travelers on other flights, and bookings had spiked.

    Passengers check in at the Delta counter at Detroit Metro Airport in Romulus, Michigan, on December 22, 2022. 

    Jeff Kowalsky | AFP | Getty Images

    An American Airlines spokeswoman said the “vast majority of our customers affected by cancellations were able to be reaccommodated.”

    Delta is “seeing steady recovery in our operations, and expect the improvements to continue over the next several hours,” a spokesman said Monday.

    Passengers also faced delayed luggage, however.

    Bill Weaver, 41, said he, his wife and five children drove from Wichita, Kansas to Dallas Fort Worth International Airport for a Friday flight to Cancun after their connecting flight into the American Airlines hub was canceled. The American Airlines flight to Cancun arrived on time but their luggage didn’t get to in Cancun until Monday, and hadn’t made it to their hotel by mid-morning, so they had to spend hundreds of dollars to buy clothing and other essentials at their hotel.

    Weaver, who works in software sales, said he used to travel frequently.

    “I’m used to missing bags and things happen but this is by far the worst I’ve ever seen,” he said.

    Extreme cold and high winds slowed ground operations at dozens of airports. More than half of U.S.-based airlines’ flights arrived late from Thursday through Saturday, with delays averaging 81 minutes, according to FlightAware.

    “Temperatures have fallen so low that our equipment and infrastructure have been impacted, from frozen lav systems and fuel hoses to broken tow bars,” said United Airlines message to pilots on Saturday. “Pilots have encountered frozen locks when trying to re-enter the jet bridge after conducting walk arounds.”

    The FAA said it had to evacuate its tower at United hub Newark Liberty International Airport in New Jersey because of a leak on Saturday.

    JetBlue, meantime, offered flight attendants triple pay to pick up trips on Christmas Eve due to staffing shortages.

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  • 5 cheap industrial stocks with upside as investors look outside tech for the next leaders

    5 cheap industrial stocks with upside as investors look outside tech for the next leaders

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  • American Airlines posts $483 million profit for late summer

    American Airlines posts $483 million profit for late summer

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    DALLAS — The three biggest U.S. airlines enjoyed a boffo summer, reaping a combined profit of more than $2 billion as Americans jammed on to planes despite fares that were sharply higher than a year ago.

    What pandemic?

    American Airlines said Thursday that it earned $483 million on record-breaking revenue that more than offset higher fuel costs in the third quarter. American predicted that profit will continue to exceed Wall Street expectations during the holiday-packed remainder of 2022.

    The results from American, however, weren’t quite as grand as figures from its more prosperous rivals. United Airlines reported a $942 million profit on Tuesday, and Delta Air Lines posted third-quarter earnings of $695 million last week.

    Clearly, many people are eager to travel after most were grounded during the early part of the pandemic. Executives at all three big U.S. airlines said they see no indication that consumer concerns about inflation and the economy are hurting ticket sales.

    “American’s third-quarter results, including our record revenue performance, are significant considering the macroeconomic uncertainty facing so many people,” CEO Robert Isom said on a call with analysts and reporters. “Demand remains strong.”

    American, which is based in Fort Worth, Texas, predicted that fourth-quarter profit will be between 50 cents and 70 cents per share, which would beat Wall Street’s forecast of 19 cents per share.

    U.S. air travel has roared back from pandemic lows in early 2020. Last Sunday, the Transportation Security Administration screened nearly 2.5 million travelers on a single day, the busiest day at the nation’s airports since February 2020.

    Travel is booming despite a 43% leap in airfares in the past year, according to government figures.

    One reason fares are high is that the number of flights has not returned to pre-pandemic levels, leaving consumers vying for fewer seats. American, for example, did nearly 10% less flying in the third quarter than in the same period of 2019.

    American said it plans to run at 95% to 100% of 2019 levels next year. That is in line with Delta, which expects to restore its full schedule by next summer. United recently announced it will expand European flying next summer.

    Isom said American could add more flights next year but will take a cautious approach. American, Delta and others canceled flights earlier this year when they didn’t have enough staff, particularly pilots.

    “We are going to make sure that we don’t outpace what we have, either in terms of aircraft deliveries if that’s the constraint, or if it’s pilots at a regional level or our ability to train pilots” at American, he said.

    For the third quarter, American said its adjusted profit, which excludes certain items, was 69 cents per share, compared with a forecast of 54 cents per share by analysts surveyed by FactSet.

    Revenue rose to $13.46 billion, slightly higher than the $13.36 billion predicted by analysts. American, which has a major hub operation in Miami and operates many flights to the Caribbean, said it lost about $40 million in revenue because of hurricanes Fiona and Ian in September.

    Also Thursday, the parent of Alaska Airlines reported a $40 million third-quarter profit on record revenue of $2.8 billion. The Seattle-based airline said, however, that non-fuel costs in the fourth quarter will be higher than expected because of three new contracts with union labor groups including pilots.

    Shares of American Airlines Group Inc. closed down 4% and Alaska Air Group Inc. dropped 5%, while shares of Delta, United and Southwest dipped by smaller percentages.

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