American Airlines cuts its revenue forecast as Delta Air Lines’ variant slows down bookings

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Airline update

United Airlines plans to reduce aircraft flights during the U.S. holiday season, which shows the profound impact of the slowdown in travel demand that began with the spread of the Delta coronavirus variant this summer.

Chief Commercial Officer Andrew Nocella said on Thursday that although potential travelers can now book months in advance, “we will provide less capacity for Christmas and Thanksgiving than planned earlier this summer “.

United Airlines was one of several US airlines that lowered their quarterly revenue forecasts on Thursday due to slower customer bookings and increased cancellations related to the highly contagious strain of Delta virus.

American airlines, Delta Air Lines, JetBlue Airways, Southwest Airlines, and United Airlines all stated in their filings with the US Securities and Exchange Commission that demand fell in August. For some, the economic slowdown lasted until September, casting a shadow over the outlook for the rest of the year.

After the slowdown in customer bookings, United predicts that its total revenue in the third quarter will fall by 33% compared to two years ago.

“A lot of changes have taken place in a short period of time,” Nocella said. The news about the spread of the variant “catch up with the situation and quickly changed the outlook”.

“Bookings in the last few days because we passed [September 6 US Labor Day] The holidays are better,” he added. “So I do feel that the situation is stabilizing. “

Southwest Airlines said its operating income last month fell 19% compared to the same period two years ago, which is close to the low end of its guidance range.

The company said that the “weakness” of leisure bookings has spread to September and October, but business bookings should “remain relatively stable” compared to August.

Travel demand around Labor Day is “solid”, and traditionally is the last opportunity for many people to squeeze in to travel before the end of the summer in the United States.However, Southwest Airlines stated that it has cancelled more trips than expected, partly because of the strong Hurricane Ida.

American Airlines has a similar situation, with fewer bookings this month and an increase in the number of cancelled trips. The company expects total revenue for the quarter to fall by 24% to 28% compared to two years ago, while the operator’s previous guidelines were to drop by about 20%.

American Airlines Chief Financial Officer Derek Kerr said: “We expect the recovery to be unstable and unpredictable.” “Due to the rise of Delta Air Lines and related headlines, revenues in August and September are showing up. Downward trend.”

At Delta Air Lines, CEO Ed Bastian said business travel Remain at 40% of pre-pandemic levels. He had predicted in July that it would reach 60% in the fall, but the coronavirus variant delayed the return of workers to the office by about 90 to 100 days.

“All our companies… are on a business trip, but they may not be able to restore our business to where we need it,” Bastian said.

Delta Air Lines’ adjusted total revenue for the September quarter will be at the lower limit of the previous guidance, down 30% to 35% from the same period in 2019.

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