Several leading US airlines says that the rise in COVID-19 cases due to the Delta variant is hurting bookings and further delaying the travel industry’s recovery. The summer got off to a strong start, with many planes full of vacationers eager to break out after being stuck at home for more than a year, however, after months of improving travel numbers, August was disappointing.
Delta Air Lines CEO Ed Bastian says that people are still travelling, but key segments – business and international flyers – are still largely missing. He believes the rise in COVID-19 cases won’t derail the travel recovery but will delay it by 90 to 120 days.
Delta says it still expects to post an adjusted pre-tax profit for the third quarter, but revenue will be toward the lower end of its previous forecast.
United Airlines reports its revenue is weaker than previously expected, and it 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 match the lower demand.
American Airlines says a slowdown that started in August has continued into September, and the airline further lowered its outlook for third-quarter revenue, while Southwest Airlines reports that leisure travel has weakened, with more cancellations and softer bookings for September and October. The airline says, however, that booking patterns for the winter holidays look normal.
Airlines are watching COVID-19 numbers closely and finding hope in the latest figures showing the surge that started in July might have peaked. The seven-day average of cases is roughly flat compared with two weeks ago.
Airline executives say they believe bookings will pick up as soon as case counts go down.
“Things moved downward rather quickly, but they can, I think, move upwards just as quickly,” Andrew Nocella, United’s chief marketing officer, said during a recent investor conference.
Americans have been willing to travel over the summer and during shorter holiday periods. Air travel over the Labour Day weekend approached 2019 levels — on two days, the Transportation Security Administration screened more than 2 million travellers. By Sept. 8, however, the number of people going through US airport checkpoints dropped back to 1.4 million, down 28% from the comparable date 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.
Canada
In Canada, Transat said on Thursday that it is encouraged with the pace of bookings for sun destinations in Mexico and the Caribbean this winter, but wary of the impact of the Delta variant and the fourth wave of the pandemic on its operations going forward.
“We currently see good trends in the bookings, even if they tend to come in closer to the departure date than they used to,” said chief executive Annick Guerard. “People are still cautious, and they decide at the last minute. But it is very clear that they are eager to travel.”
Transat says it has seen steady customer demand since resuming flights earlier this summer, but it still doesn’t expect to return to its pre-pandemic level before 2023.