US Airline Shares Rise in hopes of a setback on air travel

US Airline Shares Rise in hopes of a setback on air travel

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At an investor conference held by JPMorgan on Monday, executives from American Airlines, United, Delta and JetBlue all reported strong discussions during the traditional spring break period, and several said they also sell a growing number of tickets this summer.

“The past three weeks have been the best three weeks since the pandemic,” said Doug Parker, U.S. chief executive, about advanced ticket sales. “We’re getting very close to the 2019 levels in total discussions.”

Parker warned that revenues are still below pre-pandemic levels due to fewer discussions of more lucrative business and overseas travel. But the increased ticket orders, coupled with a recent sale of company bonds and another round of help to the industry as part of the new incentive package, mean that American is not trying to raise extra cash for the first time since the pandemic do not collect.
United (UAL) shares led the sector, with an increase of almost 8% in afternoon trading, followed by a 7% increase for American (AAL). JetBlue (JBLU) increased by 5%, while Alaska Air (ALK) Achieved 4% Delta (DAL) shares rose by about 3%. Only among the largest carriers Suidwes (LUV) was behind the pace, with only 1% higher. Southwest in Dallas has warned that traffic is declining more in February than expected due to the severe winter storms, especially in Texas. But traffic in March was stronger than previously forecast.

The current discussions and traffic feel like the beginning of the end of the impact of the pandemic on air travel, Gary Kelly, CEO of Suidwes, said at another event on Monday. But he also warns that he has never had such a challenging time predicting future travels.

“Our hope is that by the time we get to June where many of the population had access to vaccinations, we have the chance to at least equalize,” he said. Suidwes reported its first annual loss since 1972 last year.
More than 1 million passengers have passed through security checkpoints at US airports in the past four days, bringing the number of passengers to 5.2 million, according to the Transportation Safety Administration. This is the largest total of four days since US air travel almost came to a standstill by the end of March 2020.

Although the TSA score from Thursday to Sunday was equal to 78% of the country where it stood in the same period last year, it represents only half of the total for the same period in 2019.

But there was more good news from the airlines beyond the number of passengers. United have said they believe the “core cash flow” in March will be positive for the first time since the pandemic. The benchmark looks at the money the airline spends other than on aircraft purchases. The airline burned $ 19 million a day on these expenses in the fourth quarter, and it is not yet predicted when it will return to profitability.

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“We know we can not put Covid in the rearview mirror yet,” United chief executive Scott Kirby said. “Demand for business travel will only really start to recover in 2022 and will only return to 2019 levels until the summer of 2023.”

But all the airline executives spoke of signs that demand had improved, just in time for the important spring and summer travel seasons.

“There’s a lot of pent-up demand,” said JetBlue CEO Robin Hayes. “While people are being vaccinated, they jump on planes to see people they have not seen this year.”

– CNN’s Gregory Wallace contributed to this report

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