Life, it is said, is full of surprises. And for US carriers, this summer is already packed with more than its fair share. First, a raft of decent financials in the last quarter, with the promise of more of the same for the next quarter, is a welcome return to form. And not before time. Then those with transatlantic services once again came under the influence of the terrorist threat following the mid-August alert in the UK.
Less surprising, but welcome nonetheless, is the rapid recovery carriers are making from this incident. US carriers reported few cancellations, surveys found that public awareness of terror was up, but that at best (or worst) only one in 10 people planned to change their travel plans in the short term.
So the outlook is one of the same fundamentals that have been driving US airlines this year: surprisingly robust demand, enough to make it possible to operate in an era of fuel prices that could have and indeed did bankrupt airlines just a year or three back.
Other forces that would and did bankrupt some carriers a decade or so ago are now subsumed into everyday economics. For example, carriers have insisted in pushing through higher fares instead of crumbling in retreat if a rival failed to match them at once. Unit revenues for the year are up at least 11%, according to JP Morgan's New York-based airline analyst Jamie Baker.
He sees the wave of oil price increases as - up to a point - a catalyst for discipline on capacity. Baker says that cowering executives and others "should instead genuflect in the presence of higher crude, since capacity discipline appears alive and well with even the more stubborn carriers like JetBlue throttling back a little". However, Baker acknowledges that "there are limits". Carriers would be hard pushed to react quickly enough with capacity and price responses if a new oil price peak was achieved too rapidly.
But there are other early warning signs on the limits to growth: revenue rises are starting to slow slightly, perhaps beyond just seasonal sogginess internet visits and clicks to leading travel sites are down and disturbingly, two signs of irrationality have emerged. One is that old irrational force - exuberance. The other is anger.
The irrational exuberance, to recall former Federal Reserve chairman Alan Greenspan's polite term for stock-market madness, was the emergence of serious talk about mergers and consolidation. US Airways chief executive Doug Parker even went so far as to ring round other airline chiefs to remind them that he was open to deal talk. But such consolidation chatter appears premature and is merely a distraction from the serious talk about capacity restraint.
The other irrational behaviour, anger, comes from employees. This is more understandable and has sympathetic roots: labour has indeed given and given, as it hastens to point out. As the president of the Allied Pilots Association at American Airlines, Captain Ralph Hunter, put it after management perks were revealed in July: "This marks the death of shared sacrifice." And it is labour co-operation and active participation that make serious management self-control and self-discipline a reality.
Yet another danger sign is deeply rational - the behaviour of travellers. So far they are not being scared off by the latest terror threat. For them, the possible combination of more price increases and greater airport hassle may have the power to do what the bad guys can not do - keep people at home.
These warning signs come amid larger uncertainty about the direction of the US economy as the year progresses. Periodic government economic reports give readings as conflicting as a compass gone wild, with inflation about to burst out one day, but consumer sentiment waning the next.
And it is the direction of the economy that will shape decisions on who travels and how much more they are willing to pay. Calm minds are hoping that the economy cools rather than chills and in airline boardrooms the deep belief is that the torrid pace must inevitably slow - just, it is fervently to be hoped, not too soon. ■