US airlines look for holiday boost after Delta variant interrupts recovery

BOSTON: US airlines are looking at the upcoming holiday season and the reopening of vital trans-Atlantic route to recover the momentum lost in the last quarter following a resurgence in COVID-19 cases.

After a strong summer travel season, air-carriers had to temper their outlook last month for the quarter through September as the fast spreading Delta variant of the coronavirus slowed down new bookings and drove up cancellations.

A month on, dipping COVID-19 cases have raised industry hopes that passengers would be more confident to fly again.

Financial services firm Raymond James conducted an analysis of the Transportation Security Administration's 7-day average passenger screening data, which showed that while the travel demand still lags the peak in late July, it has improved from the lows in mid-September.

"Cancellations have abated, bookings are recovering," Chief Executive of Hawaiian Holdings Inc Peter Ingram told Reuters in an interview. "As we get to Thanksgiving and Christmas, we've got the opportunity for a strong, solid recovery."

Bookings have also recovered at Delta Air Lines, which expects domestic travel demand to surpass 2019 levels next year.

United Airlines on Thursday said it would fly its biggest domestic schedule since the start of the pandemic, offering more than 3,500 daily domestic flights in December - representing 91% of its domestic capacity compared to 2019.

"There's a lot of pent-up demand," said Chief Executive Scott Kirby.

The International Air Transport Association (IATA), an consortium of 290 airlines, expects air-carriers in North America to return to profit next year before their counterparts in other geographies.

BUSINESS TRAVEL

The outlook for the industry's cash cow - business travel - remains uncertain.

Airlines for America, an industry trade group, estimates business travel accounted for as much as 50% of airline industry passenger revenues before the pandemic.

Carriers were banking on office reopenings for a revival in business trips this fall. But the Delta variant forced many large employers to push back their office openings into next year.

Airlines say a revival is inevitable. However, there is no consensus on the timeline.

United's Kirby expects business travel to rebound to the pre-pandemic levels in 2023, but JetBlue's Chief Executive Robin Hayes reckons it could take "a few years." The New York-based budget carrier has reallocated flights from some business markets into leisure markets, Hayes said.

"We continue to believe that...the holiday will be strong," Hayes told Reuters in an interview. "That's certainly what we see in our forward bookings at the moment."