US airlines return to profit as European counterparts languish
US airlines are returning to profitability more quickly than their European counterparts thanks to generous government aid, a much larger domestic market and a relatively quick vaccines rollout. Three out of the four major US carriers reported a profit in the second quarter. United Airlines, which recorded a quarterly loss, said that it expected to return to profitability in the second half of the year. The speedy recovery stands in stark contrast to the situation in Europe, where airlines have racked up record losses during the pandemic as demand for flights collapsed. Dan Akins, an economist at Flightpath Economics, said that US airlines travelled “a great deal more” within their domestic market, whereas European carriers had to contend with “international boundary issues”. The US airline industry also benefited from billions of dollars of direct government support for the industry. Doug Parker, American Airlines CE, said Thursday that the mix of grants and low-interest loans made available to the aviation industry had been “an overwhelming success”. The so-called payroll support program had meant that airlines were able to keep more workers employed during the pandemic, allowing them to add extra capacity rapidly when demand returned. “Had it not been for PSP, you would not see airlines trying to grow, like we are, 45%t in a quarter,” he said. “You’d see airlines shut down.” Ed Bastian, Delta CE, said this month that the return of US travellers was a tribute to the scientists who developed the vaccines and that jabs would eventually “be key to opening the world”. United reported a $434m net loss, but the company said that with robust demand it would generate adjusted pre-tax income in the second half of the year. “We don’t just see the light at the end of the tunnel, we’re exiting the tunnel,” Scott Kirby, its CE, said this week.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2021-07-26/general/us-airlines-return-to-profit-as-european-counterparts-languish
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US airlines return to profit as European counterparts languish
US airlines are returning to profitability more quickly than their European counterparts thanks to generous government aid, a much larger domestic market and a relatively quick vaccines rollout. Three out of the four major US carriers reported a profit in the second quarter. United Airlines, which recorded a quarterly loss, said that it expected to return to profitability in the second half of the year. The speedy recovery stands in stark contrast to the situation in Europe, where airlines have racked up record losses during the pandemic as demand for flights collapsed. Dan Akins, an economist at Flightpath Economics, said that US airlines travelled “a great deal more” within their domestic market, whereas European carriers had to contend with “international boundary issues”. The US airline industry also benefited from billions of dollars of direct government support for the industry. Doug Parker, American Airlines CE, said Thursday that the mix of grants and low-interest loans made available to the aviation industry had been “an overwhelming success”. The so-called payroll support program had meant that airlines were able to keep more workers employed during the pandemic, allowing them to add extra capacity rapidly when demand returned. “Had it not been for PSP, you would not see airlines trying to grow, like we are, 45%t in a quarter,” he said. “You’d see airlines shut down.” Ed Bastian, Delta CE, said this month that the return of US travellers was a tribute to the scientists who developed the vaccines and that jabs would eventually “be key to opening the world”. United reported a $434m net loss, but the company said that with robust demand it would generate adjusted pre-tax income in the second half of the year. “We don’t just see the light at the end of the tunnel, we’re exiting the tunnel,” Scott Kirby, its CE, said this week.<br/>
