The worst seems to be over for airlines. Now you just have to wait for the summer travel madness to begin.
American Airlines and Southwest Airlines were the last two major US airlines on Thursday to release financial results for the first three months of the year. Americans lost nearly $ 1.3 billion while Southwest made $ 116 million, a welcome win after weathering its first annual loss in half a century last year.
“While the pandemic is not over yet, we believe the worst is behind us in terms of the severity of the negative impact on demand for travel,” Southwest chairman Gary Kelly said in a statement. “Vaccinations are on the rise and Covid-19 hospital stays in the US have declined significantly from their January 2021 peak. As a result, we are seeing steady weekly improvements in domestic leisure bookings, which began in mid-February 2021.”
This feeling is shared across the industry.
“With the momentum of the first quarter, we are seeing signs of continued recovery in demand,” said Doug Parker, American chief executive, in a statement Thursday. His counterpart at United Airlines made a similarly hopeful statement this week despite posting a loss of $ 1.4 billion. Last week, Delta Air Lines reported a loss of $ 1.2 billion.
The industry has been strengthened with federal support and received US $ 54 billion in grants to pay workers and other loans of US $ 25 billion last year. Credited that support for the airline’s small profit, Mr. Kelly of Southwest said that without it, the airline would have lost $ 1 billion in the first quarter.
Southwest also benefited from its limited exposure to business and international travel, which have been slow to recover and are lucrative businesses for American, Delta and United. Vacation trips within the United States, served by all airlines, are almost completely recovered.
Air traffic began to recover significantly in early March. Transportation Security Administration data showed a steady increase in the number of people screened at airport security checkpoints compared to the same period in 2019. That increase has decreased somewhat since the beginning of this month, with screenings decreasing around 42 percent last week compared to 2019.
According to Southwest, the demand for travel continues to improve as summer approaches quickly and customers are comfortable making travel plans farther out. The airline estimates that around 35 percent of expected bookings are for June and 20 percent for July.
