Record heat, crowds drive offseason boom in international travel
Sick of the heat, crowds and high prices, more U.S. travelers are discovering the offseason of international travel — and airlines and hotels are fighting for a windfall. Flights to once-seasonal European vacation destinations now start when there's still snow on the ground in the U.S. and wrap up when leaves are falling off the trees, if they end at all, instead of following traditional late-spring to late-summer travel seasons. For example, American Airlines' flight to Edinburgh, Scotland, from New York began in March. United Airlines' nonstop route to Palermo, Sicily from Newark, New Jersey, will end in December and Delta Air Lines' service to Rome from Minneapolis, Minnesota, will run into January, months later than they have in past years. With this year's surge in jet fuel expected to take a $100 billion bite out of airline profits this year, according to the International Air Transport Association, it's crucial for the industry to maximize on travel trends that attract high-spending customers. Investors are upbeat that airlines can take the fuel hit from earlier this year after they trimmed unprofitable or less profitable flights and airline executives have said strong demand has helped them pass some — but not all of those expenses along. Shares of Delta and United, the two most profitable U.S. airlines, each hit records in recent weeks, and American's shares touched an 18-month high. Airlines start reporting second-quarter results and providing third-quarter updates this month, with Delta kicking the season off on Friday. Industry executives told CNBC that international vacation seasons used to be more defined. The new trends are forcing them to rip up decades-old playbooks. "It used to be so much lumpier. There used to be more: good season, bad season," Delta President Peter Carter said in an interview. "There are so many places you can go in Europe year-round and still have an amazing experience, and that's why we're seeing such good demand into Europe." "We've seen this massive, what I would call, the creep of the seasons — the shoulder season is blending into the full season," Patrick Quayle, United Airlines' senior vice president who designs the carrier's network, said in an interview last month. Shoulder season refers to the period between a destination's peak tourist season and its offseason. International flights to Europe generally carry more premium seats like lie-flat pods than smaller jets that are used for domestic travel — and airlines are planning to expand those options further. Business-class fares on some of those routes can cost $10,000 for a round-trip instead of less than half that on a domestic route. Airfare overall is up this year compared with last as airlines try to pass along as much of their rising costs to customers as possible, but there are signs that prices are moderating, particularly as the industry braces for the peak summer travel period in July to pass.