DALLAS (AP) – Lower fuel prices are boosting airline profits and leaving enough left over for passengers to get slightly lower fares.
United Continental Holdings Inc. and Southwest Airlines Co. reported Thursday that fourth-quarter earnings soared as fuel spending dropped by about one-third, saving them hundreds of millions of dollars.
Both airlines announced plans to buy more planes and reward shareholders by purchasing more of their own stock, which makes remaining shares more valuable.
Airline stocks have slumped in early 2016 as investors fear that cheap fuel will encourage airlines to add too many flights, creating a glut of seats that will lead to lower fares.
United and Southwest executives said demand remains strong, but they conceded that a dip in fares that began in 2015 is extending into the new year.