DALLAS – Several leading US airlines warned on Thursday that the increase in COVID-19 cases due to the delta variant is hurting their bookings and further slowing the recovery of the travel industry.
Summer got off to a strong start, with many planes full of vacationers eager to break out after being at home for over a year. However, after months of improvement in travel numbers, August was disappointing.
Ed Bastian, CEO of Delta Air Lines, said on Thursday that people are still traveling, but key segments — business and international flyers — are still largely missing. He said the increase in COVID-19 cases will not derail travel recovery, but will delay it by 90 to 120 days.
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Delta said it still expects to post adjusted pre-tax profit for the third quarter, but revenue will be near the lower end of its previous forecast.
United Airlines said sales are weaker than previously expected, and forecast a pre-tax loss in the third quarter that could extend into the fourth quarter if the virus outbreak continues. It is trimming flights to meet lower demand.
American Airlines said the slowdown that began in August has continued into September and the airline further lowered its revenue outlook for the third quarter.
Southwest Airlines reported that leisure traffic has declined, with more cancellations and softer bookings for September and October. However, Southwest said winter holiday booking patterns look normal.
Airlines are closely monitoring the COVID-19 numbers, finding hope in the latest numbers showing that the surge that started in July may have peaked. The seven-day average of cases is roughly the same as two weeks ago.
Airlines executives say they believe bookings will increase once the number of cases drops.
“Things went down pretty quickly, but I think they can go up just as quickly,” Andrew Nocella, United’s chief marketing officer, said at an investor conference held by financial services firm Cowen.
Aviation stocks fell shortly after trading began Thursday, but then moved higher. By early afternoon, American was up 6% and others between 3% and 5%.
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Americans have been willing to travel in the summer and during shorter vacation periods. Air traffic over the Labor Day weekend was approaching 2019 levels — in two days, the Transportation Security Administration screened more than 2 million travelers.
By Wednesday, however, the number of people going through airport checkpoints had fallen to 1.4 million, a 28% drop from the comparable Wednesday in 2019.
United’s Nocella warned that travel in October, early November and the period between Thanksgiving and Christmas is likely to decrease.
To reassure passengers concerned about the virus, airlines have urged their employees to get vaccinated against COVID-19.
United is demanding the shots, saying it will fire workers who fail to vaccinate in the coming weeks or who deserve an exemption for medical or religious reasons. A United executive said on Wednesday that more than half of its previously unvaccinated employees have received a shot since the airline announced the requirement last month, though United declined to provide precise numbers.
Delta employees with a company health plan will receive a $200 monthly allowance starting November if they are not vaccinated. On Thursday, the airline’s health official, Dr. Henry Ting, who said nearly a fifth of Delta’s 20,000 employees who had not been vaccinated when the supplement was announced, has decided to take the injections.
Ting called that “an enormous number in terms of shifting that group that is most reluctant.”
Contributions: Lauran Neergaard in Washington