Several leading U.S. airlines warned of a slump in ticket sales and further delays in the travel industry's recovery as the number of COVID-19 cases rises due to the Delta variant.
Airlines saw an improvement over the summer, but dropped again in August as a surge of COVID-19 cases that started in July limit people's ability or desire to travel. They are now closely watching case numbers and finding hope in the latest figures that indicate the surge might have peaked.
Airline executives believe bookings will pick up again as soon as the case numbers go down, as the seven-day average of cases is roughly flat compared to two weeks prior.
"Things moved downward rather quickly, but they can, I think, move upwards just as quickly," Andrew Nocella, United Airlines' chief marketing officer, said during an investor conference held by financial-services firm Cowen.
For more reporting from the Associated Press, see below:
Delta Air Lines CEO Ed Bastian said Thursday that people are still traveling, but key segments—business and international flyers—are still largely missing. He said the rise in COVID-19 cases won't derail the travel recovery but will delay it by 90 to 120 days.
Delta said it still expects to post an adjusted pretax profit for the third quarter, but revenue will be toward the lower end of its previous forecast.
United said its revenue is weaker than previously expected, and it forecast a pretax loss in the third quarter that could extend into the fourth quarter if the virus outbreak continues. It is trimming flights to match the lower demand.
American Airlines said a slowdown that started in August has continued into September, and the airline further lowered its outlook for third-quarter revenue.
Southwest Airlines reported that leisure travel has weakened, with more cancellations and softer bookings for September and October. Southwest said, however, booking patterns for the winter holidays look normal.
Airline stocks fell shortly after trading began Thursday but then turned higher. By early afternoon, American was up 6 percent and others rose between 3 percent and 5 percent.
Americans have been willing to travel over the summer and during shorter holiday periods. Air travel over the Labor Day weekend approached 2019 levels—on two days, the Transportation Security Administration screened more than 2 million travelers.
By Wednesday, however, the number of people going through airport checkpoints dropped back to 1.4 million, down 28 percent from the comparable Wednesday in 2019.
United's Nocella warned that travel is likely to slump in October, early November, and the period between Thanksgiving and Christmas.
In a bid to reassure passengers worried about the virus, airlines have been pushing their employees to become vaccinated against COVID-19.
United is requiring the shots and said it will fire workers who don't get vaccinated in the coming weeks or merit an exemption on medical or religious grounds. A United executive said Wednesday that more than half of the previously unvaccinated employees have received a shot since the airline announced the requirement last month, although United refused to give precise numbers.
Delta employees on the company health plan face a $200 monthly surcharge starting in November if they aren't vaccinated. On Thursday, the airline's chief health officer, Dr. Henry Ting, said that nearly one-fifth of the 20,000 Delta employees who were unvaccinated when the surcharge was announced have decided to get the shots.
Ting called that "a huge number in terms of shifting that group that is most reluctant."
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
