While U.S. leisure travel ticked higher for the summer, going into second-quarter earnings Wall Street remained worried about business travel and international travel, which are a more profitable, higher-margin business for airlines. “American expects a full domestic business travel recovery in 2022, even as international flows remain lower,” he said. Southwest has continued to see yields improve, with passenger fares in June 2021 comparable with June 2019, Jefferies analysts Sheila Kahyaoglu said in her note Thursday.
On a conference call with analysts after the results, American Airlines executives continued to talk about a recovery and, like other airline executives before them, said that a resurgence in COVID-19 illness and the delta variant has not translated to fewer bookings. The stocks traded lower on Thursday, however, tracking the broader equity market after an unexpected rise in jobless claims and lingering concerns about the pandemic and the coronavirus delta variant.
The carrier sees domestic business revenue, which was at 20% of pre-pandemic levels in March, improving to 45% in June, with small- and medium-sized companies leading the way, Citi analyst Stephen Trent said in a note. Before that, United Airlines Holdings Inc.
also reported a narrower quarterly loss earlier in the week, and Delta Air Lines Inc.
showed an unexpected quarterly profit last week.
Kirby said demand was recovering “even faster than we had hoped domestically, both leisure and business demand.” The U.S. Global Jets ETF
has gained 3% so far this year, compared with gains of 16% for the S&P 500 index
in the same period. On a call with analysts the following day, United Chief Executive Scott Kirby sought to reassure Wall Street that the delta variant is of concern but unlikely to dent the recovery in air travel, saying that there’s not only light at the end of the tunnel, but also “we’re exiting the tunnel.”
United on Tuesday said that its international long-haul and business travel “accelerated even faster than anticipated.” The airline promised a profitable second half of the year. “Based on current bookings, leisure traffic and fares in July are expected to trend higher than July 2019 levels,” she said. “ News revs continue to lag, although (Southwest) is seeing steady weekly improvements in business bookings in July.”
The News Highlights
- US Airlines Profit Improved by Increased News Travel
- Check the latest News news updates and information about business, finance and more.
For Latest News Follow us on Google News
- Show all
- Trending News
- Popular By week