Dallas (AP) — US airlines say they have reached a turning point. We expect to make a profit as Americans have returned to the largest number of trips since the pandemic began after the poor first quarter.
American Airlines American Airlines said Thursday that it lost $ 1.64 billion in the first quarter, but expects sales to reach record highs in March and profits in the second quarter.
“Demand is stronger than ever,” American CEO Robert Isom told analysts.
Air travel was suppressed in January and February by an Omicron variant with increased cases of COVID-19 in both travelers and airline employees. But travelers are back in March. Airline executives believe that Americans are enthusiastic about traveling this summer and will not be discouraged by another small rise due to coronavirus cases or soaring airfares.
Industry insiders attribute the rise in airfare to a combination of soaring fuel costs, flight limits compared to pre-pandemic schedules, and strong demand.
Vasu Raja, Chief Commercial Officer of the United States, said: “There is great power in the fare environment.”
Recovery is supported by leisure travelers, but airlines say they are seeing more business travelers.
According to American Airlines, overall business trips are 80% of pre-pandemic levels, reduced by corporate travel. This is only 50% of the 2019 level. However, Isom said the number of corporate bookings was the highest since the pandemic began and “we expect it to continue as more companies reopen their offices.”
However, in addition to increased revenue, airlines have higher fuel and labor costs. Fuel costs for Americans have more than doubled from the previous year, and salary costs have risen by more than 15%.
Last summer, airlines struggled to recover early on their trips as staff shortages led to the cancellation of thousands of flights. We are currently facing a much bigger boom. The number of people passing checkpoints at US airports increased by more than 50% from a year ago to 2.1 million a day in April. It’s unclear if the airline has hired enough to avoid major turmoil this summer. ..
The main challenge is the limited supply of pilots. This may limit the ability of the airline to operate the desired number of flights.
“The shortage of pilots in the industry is a reality, and most airlines will not be able to realize their capacity plans because of the shortage of pilots for at least the next five years,” said United CEO Scott Kirby. I told analysts on Thursday.
American said it has hired 1,100 pilots since the beginning of last year. Many of them come from smaller regional airlines, which are in short supply. As a result, American will adjust the American Eagle schedule in the second quarter.
American Airlines’ passenger capacity will also be lower than planned due to delays in delivery of the new Boeing 787 jet due to production issues at the Boeing plant.
Isamu said American Airlines would adjust its schedule to match the number of planes and pilots available. He said American executives are “very confident” that airlines will operate smoothly throughout the summer.
American reported a first-quarter loss that was greater than the $ 1.25 billion loss a year ago. The Fort Worth, Texas-based airline said it lost $ 2.32 per share, except for special items. This is slightly better than the adjusted average loss of $ 2.43 per share, according to a Zacks Investment Research study. Revenue increased to $ 8.9 billion.
Alaska Airlines’ parent company, Alaska Airlines Group, announced Thursday that it lost $ 143 million in the first quarter. In contrast, the year-ago quarter was a loss of $ 131 million. Revenue more than doubled to $ 1.68 billion, down 10% from the same quarter of 2019.
Seattle-based operators expect revenue in the second quarter to be 5% to 8% higher than in the same quarter of 2019.
Chicago-based United Airlines Holdings reported a loss of $ 1.38 billion in the first quarter on Wednesday after the market closed on Thursday, but expects it to return to the black in the April-June quarter. ing. Revenue of $ 7.67 billion increased from a year ago, but decreased by 21% from early 2019 as we continue to fly less than before the pandemic.
United’s share rose 9% due to Closing Bell, American Airlines rose 4%, Delta Air Lines rose 3%, and Alaska remained almost unchanged.
Copyright 2022 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
US airlines say they have reached a turning point in recovery | Associated Press
Source link US airlines say they have reached a turning point in recovery | Associated Press