US airline stocks soar in hopes of air travel recovery

US airline stocks soar in hopes of air travel recovery

by

Speaking at an investor conference held on Monday by JPMorgan, executives from American Airlines, United, Delta and JetBlue reported strong bookings going into the traditional spring break period, and several said they are also selling an increasing number of tickets in the summer .

“The past three weeks have been the best three since the arrival of the pandemic,” said American CEO Doug Parker of advance ticket sales. “We are getting very close to 2019 levels in total reserves.”

Parker warned that revenue is still below pre-pandemic levels, due to fewer more profitable business bookings and trips abroad. But the increase in ticket orders, along with the company’s recent sale of securities and another round of aid to the industry as part of the new stimulus package, means that American is not trying to raise additional money for the first time since the pandemic.
United (UAL) stocks led the sector, rising nearly 8% in the midday trading session, followed by a 7% increase to American (AAL). JetBlue (JBLU) rose 5%, while Alaska Air (ALK) won 4% Delta (DAL) shares rose about 3%. Among the major operators, only South-west (LUV) was behind the pace, with a rise of just 1%. Dallas-based Southwest warned that February traffic dropped more than expected because of severe winter storms, mainly in Texas. But March traffic was stronger than previously forecast.

Current reservations and traffic look like the beginning of the end of the pandemic’s impact on air travel, Southwest CEO Gary Kelly said at another event on Monday. But he also warned that he has never experienced such a challenging time to predict future travel.

“Our hope is that when we get to June, when a large part of the population has had access to vaccination, we will have a chance to at least achieve balance,” he said. Southwest reported its first annual loss since 1972 last year.
More than 1 million passengers have passed security checkpoints at U.S. airports in the past four days, bringing the number of passengers screened to 5.2 million, according to the Transportation Security Administration. This is the highest total of four days since U.S. air travel almost stopped in late March 2020.

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

But there was more good news from the airlines, in addition to passenger counts. United said they believe their “main cash flow” will be positive in March for the first time since the pandemic began. This measure looks at the money the airline is spending, except for aircraft purchases. The airline was spending $ 19 million a day on these expenses in the fourth quarter and is not yet predicting when it will return to profitability.

Window closure for free changes to the cheapest airline tickets

“We know that we still can’t put Covid in the rearview mirror,” said United CEO Scott Kirby. “Demand for business travel will not begin to recover until 2022 and will not return to 2019 levels until the summer of 2023.”

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

“There is a lot of pent-up demand,” said JetBlue CEO Robin Hayes. “As people are being vaccinated, they get on planes to see people they haven’t seen in a year.”

– CNN’s Gregory Wallace contributed to this report

.Source