Analysts believe there are a number of factors helping carriers, including strong close-in bookings, which counts higher-priced business fare tickets for those flying in the next 10 days.
"What we've been seeing over the last couple of weeks is a strengthening of business fares," said Susan Donofrio, airline analyst for Macquarie. "We do a weekly fare tracker and business fares are up about eight percent year over year." Macquarie's survey of 15 routes around the country shows the average one-way business fare is currently $257.
Donofrio said another indication that airlines are seeing strong demand is the recent decision from Southwest and JetBlue to raise some ancillary fees. For example, Southwest's EarlyBird Check-In boarding fee has increased from $15 each way to $20 or $25 depending on the length of the route and the popularity of early boarding on those flights. Meanwhile, JetBlue has raised the price for checking a bag from $25 to $30 for those who buy the carrier's lowest price fares.
"Certainly, they wouldn't be doing it if there wasn't strength in demand that they are comforted by," said Donofrio.
All of that comes as the price of jet fuel, the biggest airline expense other than labor, has moderated over the last couple of months. That has many investors believing airlines fuel costs will stay in check for the foreseeable future.