Several major US airlines have revised their first-quarter forecast to predict a smaller revenue decline than expected. Delta Air Lines, United Airlines, Southwest Airlines, and JetBlue Airways have all indicated that the US leisure market is improving, reporting stronger figures than expected. But does this mean recovery is underway?
Approximately one year ago, the aviation industry ground to a halt. The following months saw huge cash burn and government support, and experts have predicted that recovery from the global pandemic could take the aviation sector several years. However, today Reuters has reported some good news; airlines are seeing improved figures.
Revisiting forecasts offer hope for the domestic market
According to Reuters, several major airlines, including United, Southwest, and Delta, have indicated signs of improvement. Delta CEO Ed Bastian is quoted as saying there are “glimmers of hope” as the airline revised its first-quarter forecast from around 65% down compared to 2019 to around 60% down.
JetBlue made a similar revision to its first-quarter revenue drop. JetBlue had said it was expecting figures to be down perhaps as much as 70% compared to 2019. Now it expects numbers to be down by around 61%.
United aims to stop all cash burn by spring. Previously United reported burn levels of around $25 million a day.
Things are starting to look positive across the entire domestic market in the US. On Friday, the TSA recorded just over 1.3 million passengers, the highest number since before the pandemic. As the largest domestic market in the world, the major US airlines may well recover before other airlines as strong domestic networks aren’t restricted by international travel bars.
Planning for recovery
Although there are some good signs for the US carriers, most airlines are placing bets of recovery on growing vaccine rollouts. Several US airlines are actively encouraging employees to take up offers of vaccination. As expected, all airlines are ensuring cleaning protocols and touchless technology are as good as possible.
New cleaning procedures and touchless lavatories and check-in options are meant to slow the virus’s spread and promote confidence. Aside from these practical steps, there isn’t much more airlines can do. As Scott Kirby previously said, “hope is not a strategy,” so although signs look good and the eye of the storm may have passed, it certainly won’t be smooth sailing from here on.
The most crucial moment which could indicate the storm is well and truly behind us is the resumption of regular transatlantic travel. Long-term recovery relies on the opening up of the international markets with flights to Europe, Asia, and Oceania. The recovery of these sectors will depend on the restrictions enforced by foreign governments, and US airlines will just have to wait and hope.
What do you think of the situation in the US? Is the recent uptick signs of a better recovery than predicted, or are you still wary? Let us know what you think in the comments.