American Airlines posts a $931m loss as the industry struggles to recover.
American Airlines lost $931m in the final three months of last year, as the Omicron variant of the coronavirus has pushed back the industry’s rebound, the company said on Thursday. After a year of recovery punctuated by setbacks, airlines are now focused on returning to profitability in 2022. Industry executives are hoping for a robust spring and summer driven by rebounds in corporate and international travel. “Over the past year, we have experienced periods of high travel demand countered by periods of decreased demand due to new Covid-19 variants,” American’s CE, Doug Parker, said Thursday. “This volatility has created the most challenging planning environment in the history of commercial aviation.” Omicron forced airline workers to call in sick at record rates over the holidays, compounding problems caused by winter storms and contributing to tens of thousands of cancellations during one of the year’s busiest travel periods. But American notably performed better over that period than its peers. Over the two weeks starting on Dec. 25, American canceled just under 1,500 flights, compared with more than 4,300 at Southwest, more than 2,500 for United and more than 2,000 for Delta. The cancellations represented 4% of American’s schedule, versus 9% for Southwest, 8% for United and 5% for Delta. Omicron will continue to weigh on demand in January and February, American said. The airline expects capacity, as measured by seats sold and distance flown, to be about 8 to 10% less in the first three months of this year than in the same period in 2019. Revenue is expected to be down 20 to 22%. American is more optimistic about the rest of the year, expecting capacity to be down only about 5% in 2022 from 2019. The airline also hopes to start turning profits again this year. The company said domestic and short-distance international travel had nearly recovered to prepandemic levels, while corporate travel within the United States was about 70% restored. Long-distance international travel continues to lag behind but is expected to improve as Omicron infections decline and vaccines are distributed abroad.<br/>
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American Airlines posts a $931m loss as the industry struggles to recover.
American Airlines lost $931m in the final three months of last year, as the Omicron variant of the coronavirus has pushed back the industry’s rebound, the company said on Thursday. After a year of recovery punctuated by setbacks, airlines are now focused on returning to profitability in 2022. Industry executives are hoping for a robust spring and summer driven by rebounds in corporate and international travel. “Over the past year, we have experienced periods of high travel demand countered by periods of decreased demand due to new Covid-19 variants,” American’s CE, Doug Parker, said Thursday. “This volatility has created the most challenging planning environment in the history of commercial aviation.” Omicron forced airline workers to call in sick at record rates over the holidays, compounding problems caused by winter storms and contributing to tens of thousands of cancellations during one of the year’s busiest travel periods. But American notably performed better over that period than its peers. Over the two weeks starting on Dec. 25, American canceled just under 1,500 flights, compared with more than 4,300 at Southwest, more than 2,500 for United and more than 2,000 for Delta. The cancellations represented 4% of American’s schedule, versus 9% for Southwest, 8% for United and 5% for Delta. Omicron will continue to weigh on demand in January and February, American said. The airline expects capacity, as measured by seats sold and distance flown, to be about 8 to 10% less in the first three months of this year than in the same period in 2019. Revenue is expected to be down 20 to 22%. American is more optimistic about the rest of the year, expecting capacity to be down only about 5% in 2022 from 2019. The airline also hopes to start turning profits again this year. The company said domestic and short-distance international travel had nearly recovered to prepandemic levels, while corporate travel within the United States was about 70% restored. Long-distance international travel continues to lag behind but is expected to improve as Omicron infections decline and vaccines are distributed abroad.<br/>
