The demand for air travel continues to surge, with U.S. carriers expected to transport a record 28.5 million passengers during the Thanksgiving holiday, a 3% increase from the previous year.
Despite the continued growth in passengers, the nation’s airlines are starting to report a drop in profits.
Industry trade group Airlines for America predicted the increase in passengers for the Thanksgiving period, from Nov. 17 to Nov. 28. The same group said rising expenses — in particular an 8.1% increase in labor costs and 17% rise in fuel costs — are cutting into profit margins.
During the first nine months of the year, the nine biggest carriers reported a pre-tax profit of $14.7 billion, which is a margin of 12%. That’s down from $18.4 billion, or a margin of 15.5%, in the same period last year, the group reported.