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

Apr 20, 2022, 8:50 PM | Updated: Apr 21, 2022, 3:25 pm
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

India launches 5G services, Modi calls it step in new era

NEW DELHI (AP) — Prime Minister Narendra Modi launched 5G services in India on Saturday, calling it a “step towards the new era.” The launch in select cities will cover the entire country over the next couple of years, a government statement said. Modi launched the much-awaited services that aim to provide seamless coverage, high […]
1 day ago
FILE - Malaysia Airlines planes taxi at a terminal while taking passengers at Kuala Lumpur Internat...
Associated Press

Malaysia aims to add US flights after safety rating boost

KUALA LUMPUR, Malaysia (AP) — The U.S. Federal Aviation Administration has upgraded Malaysia’s air safety rating to Category 1, allowing the country’s carriers to expand flights to the United States after a three-year hiatus, Transport Minister Wee Ka Siong said Saturday. Wee said the move will bolster tourism and economic growth in Malaysia, which opened […]
1 day ago
FILE - China's ambassador in Geneva ambassador Chen Xu makes a media statement criticising the U.S....
Associated Press

Western push on China, Russia at UN rights body faces test

GENEVA (AP) — Western countries are leading a rare two-pronged push at the U.N.’s main human rights body to better scrutinize the human rights records of two big world powers: China, over allegations of abuses during an anti-extremism campaign in western Xinjiang, and Russia, over its government’s crackdown on dissent and protest against the war […]
1 day ago
Russian President Vladimir Putin joins hands with Moscow-appointed head of Kherson Region Vladimir ...
Associated Press

Russia accused of ‘kidnapping’ head of Ukraine nuclear plant

KYIV, Ukraine (AP) — Ukraine’s nuclear power provider accused Russia on Saturday of “kidnapping” the head of Europe’s largest nuclear power plant, a facility now occupied by Russian troops and located in a region of Ukraine that Russian President Vladimir Putin has moved to annex illegally. Russian forces seized the director-general of the Zaporizhzhia Nuclear […]
1 day ago
Associated Press

Athletics take 5-game losing streak into matchup against the Mariners

Oakland Athletics (56-101, fifth in the AL West) vs. Seattle Mariners (86-70, second in the AL West) Seattle; Saturday, 4:10 p.m. EDT PITCHING PROBABLES: Athletics: JP Sears (6-3, 4.22 ERA, 1.34 WHIP, 45 strikeouts); Mariners: Luis Castillo (7-6, 3.06 ERA, 1.11 WHIP, 159 strikeouts) FANDUEL SPORTSBOOK LINE: Mariners -268, Athletics +218; over/under is 6 1/2 […]
1 day ago
Latvians mark their ballots at a polling station during general elections in Riga, Latvia, Saturday...
Associated Press

Latvian leader’s party expected to fare well in election

HELSINKI (AP) — Polling stations opened Saturday in Latvia for a general election influenced by neighboring Russia’s attack on Ukraine, divisions among the Baltic country’s sizable ethnic-Russian minority and the economy, particularly high energy prices. Several polls showed the center-right New Unity party of Prime Minister Krisjanis Karins emerging as the top vote-getter, with up […]
1 day ago

Sponsored Articles

Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Swedish Cyberknife 900x506...

June is Men’s Health Month: Here’s Why It’s Important To Speak About Your Health

According to the Centers for Disease Control and Prevention, men in the United States, on average, die five years earlier than women.
...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
US airlines say they’ve reached a turning point in recovery