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Travelers are flocking to airport lounges in search of complimentary food, drinks and perhaps most importantly, a chance to relax away from the hordes of travelers at the gate. The problem: plenty of other travelers are, too.

Armed with high-end rewards credit cards and fresh from years of big spending, more and more travelers are gaining access to airport lounges, turning what were once small, exclusive spaces for an elite few into a must-have stop for millions of passengers.

The trend has posed both an opportunity and a challenge for airlines and credit card companies as they market luxury to the masses. The spaces have to be both exclusive and attainable for enough people.

For top frequent flyers and certain credit card holders, standard airline lounge access is complimentary or discounted. Individual annual lounge memberships run between $650 and $850 for the major U.S. carriers, which have raised prices in recent years.

Delta’s new Sky Club at New York’s John F. Kennedy International Airport

Benji Stawski / CNBC

Delta Air Lines Sky Club lounges — and the credit cards that grant entry to them — became so popular that customers complained about the long lines and crowds at many locations. The airline in response curbed access for employees, instituted time limits and in its most controversial move yet, announced annual limits on visits for many credit card holders — even stripping some credit cards of access altogether.

But many customers complained about those changes, too, saying they were too strict. This week, Delta walked back some of the changes, highlighting how hard it has become to strike the right balance between exclusivity and access.

“Any wait is too long, and we are doing everything we can to minimize that,” Delta’s chief customer experience officer, Allison Ausband, told CNBC last summer at the opening of a new, larger Sky Club at John F. Kennedy International Airport in New York.

She said the lounges are “not a profit center for Delta by any means” but are an “investment that we’re making in the premium experience for our customers.”

Delta executives have said that revenue growth for its premium products like business class has outpaced that of main cabin economy.

More space

Delta, United Airlines and American Airlines are racing to build more lounges and spaces and larger ones to fit high demand.

They have also divided, or are planning to divide their lounges into different tiers. United, for example, opened a grab-and-go express club at its hub at Denver International Airport last year, for travelers making tight connections, which the carrier said could free up space in more full-service lounges.

The carrier separately operates a network of Polaris lounges for travelers booked in its highest cabin class, usually on long-haul international routes.

United Airlines Polaris lounge at Newark Liberty International Airport.

Leslie Josephs | CNBC

Delta is in the process of building a network of highest-tier lounges aimed at travelers in its Delta One suites and other top customers. Those spaces are slated to begin opening next year, starting with one at Kennedy Airport, followed by Los Angeles and Boston.

Credit card issuers such as JPMorgan Chase, Capital One and American Express are also opening new spaces in airports, eager to attract and retain high-spending customers.

“Customers reward companies that take care of them and that are on their side and and that create amazing experiences,” said Jenn Scheurich, head of travel at Capital One.

The company has opened clubs at Washington Dulles International Airport and Dallas/Fort Worth International Airport and plans to open one at Denver International Airport early next month, with other projects at New York’s LaGuardia Airport and Ronald Reagan Washington National Airport.

Capital One Venture X cardholders pay a $395 annual fee for that card, which comes with unlimited access to the company’s lounges, as well as access for two guests. The general public can get in for $65 a visit.

Chase opened its first Chase Sapphire lounge in Hong Kong in 2022 and its first in the U.S., at Boston Logan International Airport, in May, featuring a tap room and massage chairs. It’s planning to open other lounges at LaGuardia Airport, Washington Dulles, Las Vegas, Philadelphia, Phoenix and San Diego.

Those lounges are open to customers with Chase Sapphire Reserve cards, which have a $550 annual fee, along with two guests.

An Alaska Airlines flight operated by a subsidiary diverted to Portland International Airport in Oregon on Sunday after an off-duty Alaska pilot traveling in the cockpit tried to disable the engines, berdasarkanapa.com

Horizon Air was operating Alaska Airlines Flight 2059, which was flying from Everett, Washington, to San Francisco before it diverted and landed safely, Alaska said Monday. Pilots regularly pick up jump seats in the cockpit to commute.

“The jump seat occupant unsuccessfully attempted to disrupt the operation of the engines,” Alaska Airlines said in a statement. “The Horizon Captain and First Officer quickly responded, engine power was not lost, and the crew secured the aircraft without incident.”

The off-duty pilot, 44-year-old Joseph David Emerson, is in custody. He was charged with 83 counts of attempted murder, 83 counts of reckless endangerment and a count of endangering an aircraft, according to Multnomah County Sheriff’s Office booking records.

Emerson tried to shut down the engines by engaging the fire suppression system, which has a T-shaped handle for each engine and when deployed, will shut a valve that supplies fuel to the engine, according to an airline statement.

The crew reset the handles and the plane’s engines didn’t lose power, the airline said.

“Our crew responded without hesitation to a difficult and highly unusual situation, and we are incredibly proud and grateful for their skillful actions,” Alaska said. 

A recording of the incident from LiveATC appeared to show a pilot of the flight say that the person tried to shut the engines down.

“We’ve got the guy who tried to shut the engines down out of the cockpit and he doesn’t sound like he’s causing any issue in the back now,” according to the recording. “Other than that we want law enforcement as soon as we get on the ground and parked.”

The Federal Aviation Administration said it is “is engaged with Alaska and Horizon airlines and is supporting law enforcement investigations into Sunday evening’s incident aboard a Horizon Airlines flight.” 

Emerson has been an Alaska Airlines captain since 2019 and became a Virgin Atlantic first officer in 2012. He switched over to Alaska after its acquisition of Virgin in 2016. Alaska said that he completed all his FAA-mandated medical exams and that his certifications weren’t denied, suspended or revoked at any point.

The flight’s pilots landed the plane safely in Portland and no injuries were reported, Kieran Ramsey, FBI Portland special agent in charge, said in a statement. Ramsey said the FBI “can assure the traveling public there is no continuing threat related to this incident.”

Alaska Airlines said all of the passengers were able to get on later flights and that it is reaching out to them individually “to discuss their experience and check-in on their well-being.”

Even for budget carriers, earning elite status is now all about how much you spend.

Frontier Airlines on Tuesday joined larger airlines in announcing an overhaul of its frequent flyer program to reward travelers depending on how much they pay to fly.

Frontier and other discount airlines offer low, no-frills fares and fees for everything else from seat assignments to carry-on baggage. Those add-ons will count toward elite frequent flyer status on the Denver-based airline starting next year.

The carrier’s current program gives travelers one frequent flyer mile for each physical mile they fly on Frontier.

The new model based on spending is similar to other large airlines’ recent program changes like those at Delta Air Lines and American Airlines. Last week, Delta walked back some of its new elite status thresholds and limits on airport lounge access after customers complained about the changes.

Frontier said customers will be able to earn earn silver elite status, a new tier, after racking up 10,000 miles, which the carrier said is equal to spending $1,000. The tiers go up to “diamond” level at 100,000 miles, though there are accelerators to earn more miles at each level.

Perks include fee-free flight changes, seat assignments, in-cabin pets and, at the highest level, a second free checked bag.

Ancillary revenue is especially important to budget carriers. Frontier said in the second quarter it’s ancillary revenue rose 6% year over year to $80 per passenger, while revenue from airfare fell 15% to nearly $48 per passenger.

Frontier is scheduled to report third-quarter results before the market opens on Thursday.

Boeing said Wednesday it will deliver fewer 737 Max aircraft than it previously expected this year as it works through production flaws detected on the fuselages of some of the bestselling aircraft.

The company expects to hand over between 375 and 400 of its workhorse plane this year, down from a previous estimate of 400 to 450, which Boeing’s CFO reaffirmed during a conference last month. It marks a headwind for Boeing and for airline customers eager to receive new, more fuel-efficient jetliners.

Boeing maintained its expectations for 2023 free cash flow of $3 billion to $5 billion, despite the production problems. The company’s shares fell 2.5% on Wednesday to $177.73.

“I have heard those outside our company wondering if we’ve lost a step. I view it as quite the opposite,” CEO Dave Calhoun said in an employee note Wednesday, as the company reported third-quarter results. “Most importantly, we’ve worked hard to instill a culture of speaking up and transparently bringing forward any issue, no matter the size, so we can get things right for the future.”

He said the company now can fix those issues “once and for all.”

The 737 problems stem from misdrilled holes in the fuselages, which are produced by Spirit AeroSystems, which replaced its CEO earlier this month. Boeing and Spirit reached a new pricing agreement in October aimed at shoring up the key supplier.

Boeing has been working to increase output of new planes to meet demand for a recovery in air travel after the Covid pandemic. Budget carrier Ryanair, for one, recently cut its winter schedule, blaming delivery delays from Boeing.

Sales in the manufacturer’s commercial aircraft unit rose 25% to $7.88 billion from the third quarter of 2022, boosted by deliveries of wide-body 787 Dreamliner planes, though lower 737 deliveries and abnormal production costs led to a negative operating margin of 8.6%.

Boeing said it plans to ramp up output of the 737 to 38 planes per month by year’s end and said it is transitioning to Dreamliner production of five per month. It reaffirmed its estimate to hand over 70 to 80 Dreamliners this year.

Its defense unit was also losing money in part from a $482 million loss on its Air Force One program because of “higher estimated manufacturing cost related to engineering changes and labor instability,” as well as a $315 million loss on a satellite contract.

Here’s how the company performed during the period ended Sept. 30, compared with estimates from LSEG, formerly known as Refinitiv:

• Adjusted loss per share: $3.26 vs. $2.96
• Revenue: $18.10 billion vs. $18.01 billion

Boeing’s net loss narrowed to nearly $1.64 billion, or $2.70 a share, for the third quarter compared with the year-earlier period when it had a loss of $3.31 billion, or $5.49 a share. Adjusting for one-time items, mostly related to pension plans, the company lost $3.26 per share, a wider-than-expected adjusted loss.

Revenue rose 13% from the same three-month period a year ago to $18.10 billion, slightly ahead of analysts’ estimates.

Southwest Airlines said Thursday it plans to slow its capacity growth next year, citing moderating travel demand as booking patterns shift back to pre-Covid pandemic norms.

Southwest will expand its flying between 10% and 12% in the first quarter of 2024 from a year earlier, down from a previous forecast of as much as 16% growth, Southwest said in an earnings release. It expects to grow between 6% and 8% for the full year 2024, it said.

Airlines have expanded their flying this year, while travelers have returned to more traditional booking, traveling during peak vacation periods or holidays. That capacity expansion has driven airfare lower.

Last year, executives cited high amounts of traditionally off-peak travel coupled with a shortage of aircraft and other challenges that kept fares high.

Here’s how Southwest performed in the third quarter compared with Wall Street expectations according to consensus estimates from LSEG, formerly known as Refinitiv:

• Adjusted earnings per share: 38 cents vs. an expected 38 cents
• Total revenue: $6.53 billion vs. an expected $6.57 billion

Southwest forecast unit revenue, the amount an airline brings in for each seat it flies a mile, would drop between 9% and 11% from a year earlier in the fourth quarter, with capacity up about 21%.

“As we move into 2024, we are slowing our [available seat mile growth] rate to absorb current capacity, mature development markets, and optimize schedules to current travel patterns,” CEO Bob Jordan said in a quarterly earnings release.

Southwest’s net income in the third quarter dropped 30% from a year earlier to $193 million, or 31 cents per share, while revenue advanced 4.9% to $6.53 billion. Adjusting for the impact of labor contract adjustments and other one-time items, the company earned 38 cents per share.

Ultra-low-cost carrier Spirit Airlines on Thursday also said it was reviewing its growth plans after posting a third-quarter loss of $157.6 million, from a $36.4 million loss last year. The company forecast negative margins in the last three months of the year, citing weaker demand even for year-end holidays.

“Softer demand for our product and discounted fares in our markets led to a disappointing outcome for the third quarter 2023,” CEO Ted Christie said in an earnings release. “We continue to see discounted fares for travel booked through the pre-Thanksgiving period.”

(JetBlue Airways is trying to acquire Spirit, though the Justice Department has sued to block the deal. The trial is scheduled to start next week.)

Fellow discounter Frontier Airlines swung to a $32 million loss in the third quarter from a $31 million profit during the same period last year. That carrier also forecast negative margins for the fourth quarter.

Southwest shares fell 0.9% to $23.39, while Spirit shed 4.6% to end Thursday at $16.01 and Frontier added 9.1% to close at $4.19 a share.

Spirit Airlines will suspend training for new pilots and flight attendants next month “until further notice,” according to company memos, as it plans for slower growth amid softer demand and the expected grounding of dozens of aircraft for inspections because of a manufacturing problem with some Airbus planes’ engines.

The company had already slowed hiring and captain upgrades, Greg Christopher, vice president of flight operations at Spirit, said Thursday in a memo to pilots, which was seen by CNBC. “With these recent developments, however, we will also be suspending all new-hire training efforts starting in November, until further notice.”

The company told flight attendants that it will halt new flight attendant training starting Nov. 7 for the foreseeable future. It is also planning to offer voluntary time off for cabin crew members, according to a separate memo from Tina Milton, vice president of inflight experience.

A Spirit spokesman confirmed the changes.

“This is not a decision we’ve taken lightly, but it’s necessary to ensure our crew staffing levels match our operational need given the number of aircraft we can fly,” he said in a statement.

The Miramar, Florida-based discount carrier said it expects to have to ground an average of 26 Airbus A320neo aircraft for inspections of engines made by RTX unit Pratt & Whitney after that company disclosed a manufacturing defect in August. The carrier said it expects 13 grounded planes in January, rising to 41 in December of next year. The airline had a fleet of 202 Airbus planes as of Sept. 30, according to a filing.

“This expectation drives a dramatic decrease in the Company’s near-term growth projections,” Spirit said in a filing. It said it expects capacity to be flat to up mid-single digits next year compared with 2023. The airline is in talks with RTX about compensation for the issue.

Last month, RTX said it expected repairs to take between 250 and 300 days, with an average of 350 planes powered by the geared turbofan engines grounded worldwide between 2024 and 2026.

The budget airline Spirit on Thursday posted a net loss of $157.6 million, which was more than four times its loss a year ago. It forecast negative margins for the last three months of the year.

“We continue to see discounted fares for travel booked through the pre-Thanksgiving period,” CEO Ted Christie said in an earnings release. “And, unfortunately, we have not seen the anticipated return to a normal demand and pricing environment for the peak holiday periods.”

JetBlue Airways is in the process of trying to acquire Spirit, a deal the Justice Department has already sued to block. The trial is expected to begin next week in Boston.

Frontier Airlines, a fellow discount carrier, continues to hire flight attendants, pilots, and mechanics, an airline spokeswoman said.

CNBC’s Jim Cramer says Eaton (ETN) just had the best quarter in the industrials sector. 

The power management company late Tuesday beat analysts’ estimates for quarterly profits on high demand for its electrical components and equipment.

Eaton’s fiscal results highlight how well the firm is adapting to the industry’s transition to renewable energy. In the earnings release, CEO Craig Arnold said the firm would be investing more than $1 billion of capital to support this growth.

Shares of Eaton were up over 3% on Wednesday.

If you like this story, sign up for Jim Cramer’s Top 10 Morning Thoughts on the Market email newsletter for free.

Cramer also highlighted the bull case for peer Caterpillar (CAT). The construction giant has a “terrific story” for 2023 on the back of increased government infrastructure spending, he said.

Cramer’s Charitable Trust does not hold shares of Eaton but does have a stake in Caterpillar.

Here’s a full list of the stocks in Jim’s Charitable Trust, the portfolio used by the CNBC Investing Club.

Delta Air Lines is cutting some corporate jobs in an effort to reduce costs as the industry grapples with higher expenses such as for fuel and labor.

“While we’re not yet back to full capacity, now is the time to make adjustments to programs, budgets and organizational structures across Delta to meet our stated goals — one part of this effort includes adjustments to corporate staffing in support of these changes,” Delta said in a statement to CNBC on Wednesday. “These decisions are never made lightly but always with care and respect for our impacted team members and the Delta family.”

Delta didn’t specify how many jobs it is cutting but a spokesman said that they are a “small adjustment” to corporate and management positions. Front-line workers like pilots, flight attendants and mechanics are not affected by the cuts, the spokesman said.

Executives recently reported strong travel demand helping it more than cover costs. Delta posted a third-quarter profit of $1.1 billion, up nearly 60% from a year earlier, but had warned higher costs had reduced its bottom line.

“Growth is normalizing next year, and we expect operational reliability to continue to improve,” CFO Dan Janki said on an earnings call last month. “This will allow us to optimize how we run the airline, reducing operational buffers and driving out inefficiencies that have resulted from the intensity of the rebuild.

Delta and other carriers hired thousands of workers as travel demand bounced back in the later stages of the Covid pandemic.

Atlanta-based Delta has about 100,000 employees, up from about 83,000 at the end of 2021.

The airline had successfully encouraged thousands of employees to take buyouts during the pandemic when demand dried up.

Airlines have more recently ramped up capacity, while demand has moderated, leading to lower airfare compared with last year. Some carriers, including Southwest, are now looking at slowing their capacity growth as bookings return to more traditional patterns.

United Airlines plans to make it easier for customers to earn elite status through co-branded Chase credit cards, the latest airline to tweak its lucrative frequent flyer program to reward big spenders.

The airline isn’t changing overall requirements for elite frequent flyer status next year, a first for the carrier since the start of the Covid-19 pandemic. Instead, United said Thursday that in 2024, it will reward customers with 25 qualifying points for every $500 they spend on co-branded cards. Currently, customers get 500 points for every $12,000 spent. The carrier will also lift caps on credit card spending that can qualify toward elite status.

Travelers need 5,000 qualifying points plus four flights to get to silver status, the lowest level, or have a combination of flights and points.

Airlines reward their elites with perks such as free upgrades, when available; earlier boarding; and other perks.

But ranks of elite frequent flyers have surged in recent years as travelers continued to spend during the Covid-19 pandemic and airlines allowed them to hold on to their tier status even if they weren’t flying.

That has challenged airlines to keep their programs both exclusive and reasonably attainable and angered elites who are jostling alongside fellow travelers for upgrades or airport lounge access.

Delta Air Lines in September said elite status would be awarded solely on spend — instead of a combination of flights and spending — though last month it walked back some planned changes to its SkyMiles program and lounge access limits after customer complaints.

FORT WORTH, Texas — Airlines have a record 260 million seats to fill this quarter, and to do it, they’re offering fares that will run you about the same as a pair of movie tickets.

Southwest Airlines, for example, last month offered one-way fares of $29 for flights early in the morning or at night, just one example of airline discounting for off-peak periods.

“I would characterize the amount of discounting or sales that we’re doing today as a bit more than normal,” Ryan Green, Southwest’s chief commercial officer, told reporters at the Skift Aviation Forum earlier this month. He said the industry’s increased capacity in recent months means there are more seats to fill, even though the carrier’s average fare was up in the last quarter from a year ago.

Leisure travelers, meanwhile, have largely returned to more traditional booking patterns after years of pandemic swings in demand, leaving airlines looking for ways to fill planes outside of holidays or other popular travel periods.

“Typically, you see a step increase in price at each seven-day mark before a flight,” said Scott Keyes, founder of Scott’s Cheap Flights, a flight-deal company that recently rebranded as Going. But airlines are either dropping last-minute fares or not raising them as much as usual, he said.

Airlines have scheduled a record 259.8 million seats for domestic flights in the fourth quarter, up nearly 8% from last year, on 1.86 million flights, up 6% from 2022, according to aviation-data firm Cirium.

Getting the balance right in the off-season is a challenge for airlines, which make the majority of their revenue in the second and third quarters during the busy spring and summer seasons. Most major carriers reported record revenue and strong demand during those periods, with some executives reporting higher growth for international destinations over domestic ones.

Falling fares

The U.S. inflation read for September showed airfare dropped more than 13% from a year earlier, while overall consumer prices rose.

JetBlue Airways said average fares dropped more than 12% in the third quarter during the same period of 2022 to $201.73.

Budget carrier Spirit Airlines said fares dropped nearly 28% from a year earlier to $48.73, though non-ticket revenue, which includes add-ons such as seat selection fees and checked bags, rose 1% to $67.70.

The Miramar, Florida-based airline, which JetBlue is trying to buy, warned about fare discounting before Thanksgiving and said, “unfortunately, we have not seen the anticipated return to a normal demand and pricing environment for the peak holiday periods.”

Fellow ultra-discounter Frontier Airlines said fares averaged a little more than $39 in the last quarter, down 32% from a year ago.

All three carriers forecast losses for the last three months of the year.

Rethinking capacity

Declining pricing power in the off-peak periods has forced carriers to rethink where they’re deploying their planes.

Southwest plans to slow its growth next year to address the shifting demand patterns, though CEO Bob Jordan described demand on an earnings call late last month as “strong.”

“Capacity is the most precious commodity you have to produce revenue, and you got to deploy that capacity as efficiently as possible against demand,” Jordan said during the Skift Aviation Forum.

The carrier is planning to fly less on nonpeak days, like Tuesdays, compared with higher-demand periods, a measure that also prioritizes crews’ time so they are ready fly more when it’s busy, Jordan said.

Frontier Airlines CEO Barry Biffle told CNBC that one thing the airline is changing is finding less crowded markets for its flights.

“We are concentrating our growth away from the saturated markets,” he said. “We will not shrink in Orlando and Vegas, but we’re probably not going to grow it either.”

Holiday demand is still strong

With shifting demand comes those eye-catching, double-digit fares.

But they’re usually gone quickly and are nearly guaranteed to be unavailable for peak holiday periods, with demand expected to hit or break records.

Delta Air Lines said it expects to carry between 6.2 million and 6.4 million passengers from Nov. 17 to Nov. 28 during the Thanksgiving period, compared with 5.7 million last year and 6.25 million in 2019. United Airlines said it expects to fly 5.9 million passengers from Nov. 17 to Nov. 29, up 13% from last year and 5% more than 2019. American Airlines forecast a record 7.8 million travelers from Nov. 16 to Nov. 28, up from 7 million last year and beating out 2019 by around 200,000 customers.

Southwest CEO Jordan said year-end holiday bookings are running ahead of last year’s pace.

Flight tracker Hopper said “good deal” domestic fares, which it defines as the bottom 10th percentile of available fares, are averaging $248 for Thanksgiving, down from $271 last year and $276 in 2019.

Could it last?

Airlines are now poring over their schedules for 2024 to try to best use their aircraft while they face higher costs such as fuel and labor that have pinched margins.

“You’re seeing carriers put out fares that look kind of like our fares, and what you should really think about is that that’s not going to be permanent,” Frontier’s CEO Biffle said, citing costs.

Carriers have gotten more sophisticated about addressing shifting demand patterns, meaning they can cut flights or capacity during travel lulls.

Next year, fares are likely to stabilize, but it’s too early to tell what promotional fares will be, said Henry Harteveldt, founder of travel industry consulting firm Atmosphere Research Group.

“If inflation really continues at the torrid place it has been, if we see hiring soften, airlines may feel a need to invest in deeper promotion,” he said.

One advantage for full-service carriers is the variety of fares and products they can offer, from no-frills basic economy to first class, Harteveldt. That means they could increase their inventory of cheaper basic economy fares during weaker demand periods, or raise fares when demand is high for premium seats.

Airlines “have the most sophisticated cash registers of any industry,” he said.