Airlines bet on big December after Covid variant setback

DALLAS (AP) – Airlines plan for a big December, believing the recent surge in a highly contagious variant of COVID-19 is wearing off and that vacation travel will skyrocket.

The carriers say that even after encouraging thousands of employees to quit during the height of the pandemic, they will still be able to handle the vacation burden.

But in ominous news on Thursday, Southwest Airlines reported that it lost $ 75 million that month to a snowstorm of flight cancellations – disruptions that started with bad Florida weather but got out of hand due to staffing issues. The airline has cut its flight schedule and believes it has fixed the problem.

In addition, the airlines are struggling with rising fuel costs and the effort to hire more employees. Southwest predicted it will lose money in the fourth quarter.

American Airlines faced widespread delays early in the summer and then brought more pilots back from absenteeism. American said it will have almost a full flight schedule, including more than 6,000 flights on some peak days during the holidays.

“We expect a lot of passengers, a lot of catching up to do,” as COVID-19 rates fall, said Robert Isom, the airline’s president. “We do our best to make sure we have the right (people) in the right place and at the right time.”

However, United Airlines CEO Scott Kirby warned this week that some airlines could face disruption later this year because they were slower than his company to vaccinate workers against COVID-19 under a presidential order.

The vacation travel comments came as American and Southwest reported third-quarter profits thanks to significant federal pandemic aid.

American based in Fort Worth, Texas, made $ 169 million in profits after raising nearly $ 1 billion in tax dollars to cover most of its labor costs. The airline felt the effects of the highly contagious Delta variant of COVID-19 in late summer, which resulted in a slowdown in bookings and an increase in cancellations across the industry.

“The third quarter started off very strong … But then the proliferation of the Delta variant resulted in fewer people flying,” said Chairman and CEO Doug Parker and Isom in a statement to employees. “We were profitable in July, but losses followed in August and September.”

Parker vowed that while the variant “delayed some of our sales recovery, it didn’t stop our progress.”

US recreational travel has returned to roughly pre-pandemic levels, and Parker expressed confidence that business and international travel will soon pick up.

American said fourth-quarter sales will decrease 20% from the same pre-pandemic quarter in 2019. In the third quarter, sales were $ 8.97 billion, 25% less than two years ago.

Dallas-based Southwest posted $ 446 million in net income after receiving $ 763 million in federal aid. Southwest said it doesn’t expect to make a profit in the fourth quarter due to the higher cost and continued loss of revenue from the Delta variant, which was valued at $ 100 million.

Both American and Southwest reported that they would have lost money without the federal funds and other special items, but the adjusted losses were slightly less than analysts expected.

Alaska Airlines reported a profit of $ 194 million. Without special items, the Seattle-based airline would have made $ 187 million, or $ 1.47 per share, compared to analysts forecast of $ 1.36 per share. Revenue of $ 1.95 billion was a little more than analysts expected.

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David Koenig can be reached at www.twitter.com/airlinewriter



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