Consumers have the travel bug but airlines are struggling to increase profits.
Air travel demand worldwide rose more than 7 percent in August alone from a year earlier, and airlines worldwide carried a record 3.8 billion passengers last year, according to the International Air Transport Association industry group.
But analysts expect the largest U.S. airlines to post lower third-quarter profits, after carriers faced higher costs, hurricanes and competition during what is usually a busy quarter for travel.
Delta Air Lines, the second-largest U.S. carrier by traffic and the largest by market capitalization, will likely post earnings per share of $1.53, a decline of 10.1 percent, according to analysts polled by Thomson Reuters. Delta reports before the market opens on Wednesday. Analysts forecast Delta's quarterly revenue at $11.03 billion, a 5.2 percent increase over the July-September quarter of 2016.
The airline last week warned investors that Hurricane Irma cost it $120 million and trimmed its operating margin forecast to a range of 15.5 percent to 16.5 percent, from its estimate in July of a margin as high as 20 percent for the third quarter.
Delta's competitors are facing profit declines too, analysts said. Forecasts showed a 36 percent year-over-year decline to $1.99 a share for United Continental Holdings, which reports Oct. 18, while July-September profits at American Airlines will likely come in 24 percent lower than the year-earlier quarter at $1.34 a share, according to analysts. Estimates for domestic behemoth Southwest's earnings per share will likely drop 6.1 percent to 0.87 cents, analysts said.
Airline stocks surged on Tuesday after American Airlines slightly raised its estimate for a key revenue metric and United forecast better-than-expected revenue for the third quarter.