US airlines say they’ve reached a turning point in recovery

Apr 21, 2022, 8:50 AM | Updated: Apr 22, 2022, 8:02 am
FILE - American Airlines passenger jets prepare for departure, Wednesday, July 21, 2021, near a ter...

FILE - American Airlines passenger jets prepare for departure, Wednesday, July 21, 2021, near a terminal at Boston Logan International Airport, in Boston. American said Thursday, April 21, 2022, it lost $1.64 billion in the first quarter, which was marred by thousands of flight cancellations, many of them because pilots and flight attendants were out with COVID-19. (AP Photo/Steven Senne, File)

(AP Photo/Steven Senne, File)

DALLAS (AP) — U.S. airlines say they have hit a turning point: After a lousy first quarter, they expect to be profitable as Americans return to travel in the biggest numbers since the start of the pandemic.

American Airlines is the latest carrier to give a rosy outlook for the rest of 2022. American said Thursday that although it lost $1.64 billion in the first quarter, sales hit a record in March, and the company expects to earn a profit in the second quarter.

“Demand is as strong as we have ever seen it,” American CEO Robert Isom told analysts.

American’s upbeat view echoed similar comments from Delta Air Lines and United Airlines, which both predicted in recent days that they will earn full-year profits despite big losses in the first quarter.

Air travel was subdued in January and February by the omicron variant that caused an increase in COVID-19 cases among both travelers and airline employees. But travelers came back in March, and airline executives believe that Americans are eager to travel this summer and won’t be discouraged by another, smaller uptick in coronavirus cases and higher airfares.

Industry officials attribute rising airfares to a combination of covering higher fuel costs, a limited number of flights compared with schedules before the pandemic, and strong demand.

“We are encouraged that indeed month to month we are seeing a greater increase in fares,” said Vasu Raja, American’s chief commercial officer. “We are seeing a lot of strength in the fare environment.”

The recovery is being powered by leisure travelers, but the airlines say they are seeing more business travelers.

American said overall business travel is 80% of pre-pandemic levels, dragged down by corporate travel, which is only 50% of 2019 levels. Isom said, however, that corporate bookings are the highest they have been since the start of the pandemic, “and we expect that to continue as more companies reopen their offices.”

Along with higher revenue, however, airlines face higher costs for fuel and labor. American’s fuel bill more than doubled from a year earlier, and payroll costs rose more than 15%.

Airlines struggled with a nascent recovery in travel last summer, as understaffing contributed to thousands of canceled flights. Now, facing a much bigger boom — the number of people going through checkpoints at U.S. airports is up more than 50% from a year ago to 2.1 million a day in April — it’s unclear whether airlines have done enough hiring to avoid bigger disruptions this summer.

A major challenge will be the limited supply of pilots, which could limit the ability of airlines to operate as many flights as they would like.

“The pilot shortage for the industry is real, and most airlines are simply not going to be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five-plus years,” United CEO Scott Kirby told analysts Thursday.

American said it has hired 1,100 pilots since the start of last year. Many of those came from smaller, regional airlines, leaving those carriers with shortages. As a result, American will trim its American Eagle schedule in the second quarter.

American’s passenger-carrying capacity will also be lower than planned because deliveries of new Boeing 787 jets have been delayed by production problems at Boeing factories.

Isom said American will adjust its schedule to match the number of available planes and pilots. He said American executives “have tremendous confidence” that the airline will operate smoothly through the summer.

American reported a bigger first-quarter loss than a year ago, when it lost $1.25 billion. The Fort Worth, Texas-based airline said that excluding special items it lost $2.32 a share, slightly better than the average forecast of an adjusted loss of $2.43 per share, according to a Zacks Investment Research survey. Revenue rose to $8.9 billion.

Alaska Air Group, the parent of Alaska Airlines, said Thursday that it lost $143 million in the first quarter, compared with a $131 million loss a year earlier. Revenue more than doubled to $1.68 billion but was down 10% from the same quarter in 2019.

The Seattle-based carrier forecast that second-quarter revenue will be 5% to 8% higher than in the same quarter of 2019.

After the market closed on Thursday, Chicago-based United Airlines Holdings reported Wednesday a $1.38 billion loss for the first quarter but said it expects to return to profitability in the April-to-June quarter. Revenue of $7.67 billion was up from a year ago but down 21% from early 2019, as the airline continues to run fewer flights than before the pandemic.

Shares of United rose 9% by the closing bell, while American gained 4%, Delta Air Lines added 3%, and Alaska was little changed.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Today in History: July 2, Amelia Earhart disappears

Today in History Today is Saturday, July 2, the 183rd day of 2022. There are 182 days left in the year. Today’s Highlight in History: On July 2, 1937, aviator Amelia Earhart and navigator Fred Noonan disappeared over the Pacific Ocean while attempting to make the first round-the-world flight along the equator. On this date: […]
22 hours ago
Associated Press

Baby’s father charged in slaying of stroller-pushing NYC mom

NEW YORK (AP) — The ex-boyfriend of a New York City woman shot dead Wednesday as she pushed their infant daughter in a stroller has been arrested and charged with killing her, police said Friday. Slain mother Azsia Johnson’s family identified suspect Isaac Argro as the baby’s father and said he routinely abused Johnson, beating […]
22 hours ago
Associated Press

Judge: Sheriff must post bail after anti-harassment order

TACOMA, Wash. (AP) — The sheriff of Pierce County, Washington, was ordered to post $100,000 bail while he awaits trial on false-reporting charges related to his controversial confrontation last year with a Black newspaper carrier. Judge Jeffrey Jahns on Friday imposed the bail — 10 times the amount requested by prosecutors — during a hearing […]
22 hours ago
FILE - Lights illuminate a coal mine at twilight, Jan. 13, 2022, in Kemmerer, Wyo. With the nearby ...
Associated Press

Court leaves dwindling paths for Biden’s climate mission

WASHINGTON (AP) — More than 500 days into his presidency, Joe Biden’s hope for saving the Earth from the most devastating effects of climate change may not quite be dead. But it’s not far from it. A Supreme Court ruling Thursday not only limited the Environmental Protection Agency’s ability to regulate climate pollution by power […]
22 hours ago
Associated Press

Sheriff: People getting out of Texas trailer were work crew

SAN ANTONIO (AP) — A group of people who were spotted getting in and out of a parked semitrailer in San Antonio were part of a work crew, not a human-smuggling operation, authorities said Friday. Authorities checked the vehicle after someone alerted a deputy constable to it, just days after 53 migrants died when they […]
22 hours ago
Lauren Wright, a Navy spouse whose family was sickened by jet fuel in their tap water, shows her su...
Associated Press

Distrust remains after Navy report on tainted Hawaii water

HONOLULU (AP) — Lauren Wright continues to be leery of the water coming out of the taps in her family’s U.S. Navy home in Hawaii, saying she doesn’t trust that it’s safe. Wright, her sailor husband and their three children ages 8 to 17 were among the thousands of people who were sickened late last […]
22 hours ago

Sponsored Articles

(Courtesy Condor)...
Condor Airlines

Condor Airlines shows passion for destinations from Sky Harbor with new-look aircraft

Condor Airlines brings passion to each flight and connects people to their dream destinations throughout the world.
...
Day & Night Air Conditioning, Heating and Plumbing

Most plumbing problems can be fixed with regular maintenance

Instead of waiting for a problem to happen, experts suggest getting a head start on your plumbing maintenance.
...
Christina O’Haver

BE FAST to spot a stroke

Every 40 seconds—that’s how often someone has a stroke in the United States. It’s the fifth leading cause of death among Americans, with someone dying of a stroke every 3.5 minutes.
US airlines say they’ve reached a turning point in recovery