US airline stocks are rising in hopes of a return to air travel

by

Speaking at an investor conference hosted by JPMorgan on Monday, executives from American Airlines, United, Delta and JetBlue reported that strong bookings have entered the traditional spring period and several said they are also selling a growing number of tickets in summer.

“The last three weeks have been the best three weeks since the pandemic hit,” said U.S. CEO Doug Parker on advanced ticket sales. “We are very close to the levels of 2019 in total bookings.”

Parker warned that revenues are still below pre-pandemic levels, due to fewer bookings from more profitable businesses and travel abroad. But rising ticket orders, along with a recent sale of the company’s bonds and another round of aid to the industry as part of the new incentive package, means the American is not trying to raise extra money for the first time since the pandemic.
United (UAL) shares led the sector, up almost 8% in midday transactions, followed by a 7% increase in American (AAL). JetBlue (JBLU) increased by 5%, while Alaska Air (ALK) earned 4% Delta (FROM) shares increased by about 3%. Only among the main carriers Southwest (LUV) was behind the pace, up just 1%. The Dallas-based Southwest has warned that its February traffic has fallen more than expected due to bad winter storms, especially in Texas. But traffic in March was stronger than previously forecast.

Current bookings and traffic feel 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 had never experienced such a challenging time to predict future journeys.

“Our hope is that by the time we get to June, where you have a large part of the population that has had access to vaccinations, we have a chance to break at least,” he said. Southwest reported the first annual loss since 1972 last year.
More than 1 million passengers passed through security checkpoints at US airports in each of the last four days, bringing the number of passengers examined to 5.2 million, according to the Transportation Security Administration. This is the largest total of four days since US air travel stopped almost at the end of March 2020.

Although the number of TSAs from Thursday to Sunday was equal to 78% of the place 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 beyond the number of passengers. United said it believes the “core cash flow” will be positive in March, for the first time since the pandemic began. This measure concerns the money the airline spends, other than for the purchase of aircraft. The airline earned $ 19 million a day for these expenses in the fourth quarter and still does not predict when it will report a return to profitability.

Closing the window at the tax-free exchange of the cheapest flights

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

But all the airline executives talked about signs of improving demand, just in time for the important spring and summer travel seasons.

“There are a lot of applications being held,” said JetBlue CEO Robin Hayes. “As people get vaccinated, they jump on planes to see people they haven’t seen in a year.”

– CNN’s Gregory Wallace contributed to this report

.Source