Airlines rally as US travel rebound quickens into summer

Bloomberg

US airlines rose as the country’s three biggest carriers said a travel rebound is gaining steam, with United Airlines Holdings Inc and Delta Air Lines Inc heading for the highest closing price in about six weeks.
The pace of recovery has been faster than expected, Delta President Glen Hauenstein said. United predicted it would turn a profit before certain items next quarter, while American Airlines Group Inc said corporate trips and long overseas flights — the worst-hit segments during the coronavirus pandemic — are poised for improvement.
“Business travel and long-haul international are starting to show encouraging signs,” American Chief Financial Officer Derek Kerr said at an annual transport conference by Wolfe Research, which hosted most of the airline executives in person in New York. “We’re encouraged by everything we’re seeing.”
The upbeat outlooks from all three companies validate expectations that a US travel recovery will strengthen this summer as expanding vaccination rates prompt more Americans to fly again. Domestic travel yields, a measure of the average fare for each seat flown a mile, are expected to surpass the pre-pandemic levels of 2019 this summer, United said.
When summer trips wind down, United expects “a big ramp-up in business traffic across the country,” as more people return to the workplace and resume traveling for their employers, CEO Scott Kirby said.
Delta and American also advanced, giving investors a boost after a rally in February and March stalled last month amid questions about how robust the summer recovery would be.
The rebound in demand is big enough that United said it now expects positive earnings before interest, taxes, depreciation and amortisation in June and the third quarter, after excluding one-time items.
Last month, the company declined to put a timetable on its financial recovery, even as Delta reiterated that it expected to eke out a third-quarter profit. Business travel remains subdued but non-leisure bookings are showing signs of recovery, United said.