New York (CNN Business)The US airline industry hit a dubious milestone this week: For the first time since the pandemic began, air travel is up from a year ago.
That’s a positive sign for battered airlines and a potentially worrying sign to health experts. But it’s also an incredibly low hurdle to clear.About 1.1 million people passed through US airport screening on Wednesday, according to the Transportation Security Administration, up from the 954,000 who were screened same day last year.
That increase is still a heavily depressed level, as it’s only 52% of the traffic the same day in pre-pandemic 2019.
“We’ll have to see what the uptick really is,” said Nick Calio, CEO of Airlines for America, the US industry’s trade group, in an interview with CNN. “Right now it’s looking like it’s going to be better. But you have to keep it in context.”Read MoreFor airlines just to break even, Calio said, they need at least 70% of normal traffic.The comparative surge in US air travel this week aligns with both spring break and rising vaccination rates. But the Centers for Disease Control has expressed concerns about the impact on Covid-19 infection rates. Health officials say they are looking at travel now for clues on how best to relax restrictions for those who are fully vaccinated, though they need more data: “We are revisiting the travel question,” CDC Director Dr. Rochelle Walensky said Wednesday. But as data remain scarce, the bruised airline industry is looking for signs of pent-up demand for air travel. Wednesday’s traffic also marked the seventh straight day of more than 1 million people passing through US airports, a first in the pandemic era, which had previously marked only five 1-million-plus days in a row at the end of the December holiday period.In another hopeful sign, airlines are reporting better bookings ahead for this summer, with American Airlines CEO Doug Parker saying Monday that the company is “getting very close to 2019 in total bookings.”
US airline stocks rise on hopes for a travel reboundStill, planes being fuller doesn’t necessarily mean that the airlines’ financial troubles are over. Airline executives agree it’s leisure travel that has returned, not more lucrative business travel — so revenue is still likely to be down even if the headcount improves.International traffic is also still well off of year-ago levels due to many countries’ restrictions on cross-border travel with many countries.
All of the airlines are expected to report losses once again in the first quarter, after a combined $32 billion in losses in 2020, excluding special items. But investors are getting more optimistic: Shares of Southwest (LUV), Alaska Air (ALK), JetBlue (JBLU) and Hawaiian Airlines (HA) are already above pre-pandemic levels, while American (AAL), Delta (DAL) and Spirit (SAVE) are close to that benchmark. Only shares of United (UAL) are down significantly from where they were in late January 2020.– CNN’s Pete Muntean and Gregory Wallace contributed to this report
Source: edition.cnn.com
