If you were expecting airfares to tumble anytime soon, don't.
Southwest Airlines CEO Robert Jordan said this week there is no quick turnaround coming, as unfortunate as that might sound for the consumer. Jordan said the perfect storm in the aviation industry of inflation and fluctuating fuel prices-among other factors that airlines can't control-as well as pilot shortages, continue to conspire to drive airfares up.
"Looking forward, demand continues to be strong," he said during the airline's second-quarter earnings call, according to the Wall Street-focused publication The Street. "We continue to experience both inflationary pressures and headwinds from lower productivity and efficiency."
Jordan also noted that while the airline has achieved its goals to replenish staff, Southwest and other carriers have had to increase wages in order to recruit and retain staff.
In addition, carriers are balancing demand with supply. That is, airlines have cut back on flight schedules, limiting the consumer's options, and cramming just about every flight to its fullest.
"Consumer and business sentiment is down, and there are data points out there that could indicate early signs of a slowdown," Jordan said. "But so far, demand remains strong, and we haven't seen material impacts to our business. As always, we'll continue to monitor the environment and be ready to respond if needed. It's helpful to remember that we have historically lagged in terms of impact to revenues going into a recession, and we have typically lagged recovery coming out."
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