American Airlines Group Inc. and Southwest Airlines Co. on Thursday reported better quarterly results than investors had expected, rounding up earnings season for major U.S. airlines with an uptick in domestic business travel.

Earlier Thursday, American
AAL,
-1.12%

reported a narrower-than-expected loss and Southwest
LUV,
-3.46%

reported a better-than-expected GAAP profit, albeit on the back of payroll assistance, for their second quarters.

Before that, United Airlines Holdings Inc.
UAL,
-0.31%

also reported a narrower quarterly loss earlier in the week, and Delta Air Lines Inc.
DAL,
-1.32%

showed an unexpected quarterly profit last week.

The stocks traded lower on Thursday, however, tracking the broader equity market after an unexpected rise in jobless claims and lingering concerns about the pandemic and the coronavirus delta variant.

On a conference call with analysts after the results, American Airlines executives continued to talk about a recovery and, like other airline executives before them, said that a resurgence in COVID-19 illness and the delta variant has not translated to fewer bookings.

The carrier sees domestic business revenue, which was at 20% of pre-pandemic levels in March, improving to 45% in June, with small- and medium-sized companies leading the way, Citi analyst Stephen Trent said in a note.

“American expects a full domestic business travel recovery in 2022, even as international flows remain lower,” he said.

While U.S. leisure travel ticked higher for the summer, going into second-quarter earnings Wall Street remained worried about business travel and international travel, which are a more profitable, higher-margin business for airlines.

Southwest has continued to see yields improve, with passenger fares in June 2021 comparable with June 2019, Jefferies analysts Sheila Kahyaoglu said in her note Thursday.

“Based on current bookings, leisure traffic and fares in July are expected to trend higher than July 2019 levels,” she said. “Business revs continue to lag, although (Southwest) is seeing steady weekly improvements in business bookings in July.”

United on Tuesday said that its international long-haul and business travel “accelerated even faster than anticipated.” The airline promised a profitable second half of the year.

On a call with analysts the following day, United Chief Executive Scott Kirby sought to reassure Wall Street that the delta variant is of concern but unlikely to dent the recovery in air travel, saying that there’s not only light at the end of the tunnel, but also “we’re exiting the tunnel.”

Kirby said demand was recovering “even faster than we had hoped domestically, both leisure and business demand.”

The U.S. Global Jets ETF
JETS,
-1.16%

has gained 3% so far this year, compared with gains of 16% for the S&P 500 index
SPX,
+0.20%

in the same period.

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