Forbes Daily: The K-Shaped Economy Is Hitting The Airline Industry |
The K-shaped economic divide between the rich and poor is showing up in airline balance sheets.
Delta exceeded expectations for its fourth quarter earnings, with a 9% increase in revenue from premium seating. But revenue for the “main cabin” (basic economy) fell 7%, a steeper drop than the 4% decline seen in the previous quarter.
In a K-shaped economy, the wealthy benefit from rising asset values, while lower-income consumers struggle amid inflationary pressures and stagnating wages. “Our economy today resembles a top-heavy Jenga tower,” Peter Atwater, the economist who first popularized the notion of a K-shaped economy, recently told Bloomberg.
Delta and other airlines have invested in their premium seating amid the increased demand.
The S&P 500 is approaching 7,000 points, a remarkable milestone as big tech has taken the U.S. stock market to new heights. The index ended Tuesday just 36 points short, just over a year after hitting the 6,000 mark, though analysts have warned that equity markets have outpaced real economic performance in recent years.
With utility costs surging, Microsoft released details about a plan to alleviate concerns about its large-scale effort to build new AI data centers. The company said it would ask utility companies and commissioners to set higher rates for their data centers, and pledged to reduce water usage. President Donald Trump said the government worked with Microsoft to secure their “commitment.”
Saks Global—the parent company of Saks Fifth Avenue and Neiman Marcus—filed for bankruptcy protection early on Wednesday, amid struggles with debt and sliding sales just a year after the two luxury department stores........