DALLAS (AP) – American Airlines and Southwest Airlines made third-quarter profits thanks to federal pandemic aid – smaller Alaska Airlines …
DALLAS (AP) – American Airlines and Southwest Airlines made profits in the third quarter thanks to federal pandemic aid – smaller Alaska Airlines have done the trick even with no money from taxpayers – and expect the planes to be packed over the holidays.
Still, airlines reported Thursday that higher spending on kerosene and labor would create uncertainty for the rest of the year. Southwest expects to lose money in the fourth quarter.
Airlines are still waiting for a significant recovery in business travel, a very lucrative part of their business. They say business travelers will return as soon as companies fully reopen their offices, but that mood sounds more like hope than certainty.
And airlines are struggling to comply with a White House order to vaccinate their workforce. Each of the leading US airlines has a different approach: United has a tough vaccination mandate. Delta uses a surcharge to get the workers to get the shots. American and Southwest are looking for a way to please the Biden government without offending anti-vaccine workers.
It adds up to an interesting fall and winter for the industry, which is struggling to recover after being hit by the pandemic for more than a year.
Airline officials thought they ended the recovery this summer when domestic recreational travel hit pre-pandemic levels. However, the highly contagious Delta variant resulted in an increase in COVID-19 cases, which resulted in a slowdown in flight bookings and an increase in cancellations.
“The third quarter started very strong … But then the spread of the Delta variant led to fewer people flying,” said American Airlines CEO Doug Parker and President Robert Isom in a statement to employees. “We were profitable in July, but losses followed in August and September.”
Southwest said it lost $ 300 million in revenue in the quarter due to the variant.
Dallas-based Southwest suffered another $ 75 million loss after the quarter ended when more than 2,300 flights were canceled over three days this month due to disruptions that started with bad weather and air traffic control delays and out of control due to staffing issues were advised.
Southwest officials said they are continuing to cut the airline’s flight schedule through March next to ensure the workload matches the workforce. Both Southwest and American are hiring, and they say they will have enough for the holidays and next summer.
Airlines say the variant slump in ticket sales has subsided, and they’re looking forward to strong Thanksgiving and Christmas sales.
“Booking trends have rebounded well in both leisure and business, and holiday booking trends are in line with 2019,” said Robert Jordan, who will become Southwest CEO in February, on a call to analysts and reporters.
American plans to operate 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 continue to fall, Isom said. “We do our best to make sure we have the right (people) in the right place and at the right time.”
American, based in Fort Worth, Texas, claims it made $ 169 million in the third quarter after receiving nearly $ 1 billion in federal aid to cover most of its labor costs. Sales were $ 8.97 billion, 25% less than two years ago. American said fourth quarter sales would be 20% lower than the same period in 2019.
Southwest reported $ 446 million in net income after receiving $ 763 million in federal aid. Sales were $ 5.64 billion.
Both American and Southwest would have lost money without federal pandemic aid, but adjusted losses were slightly less than Wall Street expected, according to FactSet analyst polls.
Alaska Airlines posted profits of $ 194 million on revenues of $ 1.95 billion. It was the first time since the pandemic began that the Seattle-based airline posted a profit without government aid. The results were also slightly better than the analysts expected.
In the afternoon session, American stocks were up 1% while Southwest and Alaska were both down about 2%.
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David Koenig can be reached at www.twitter.com/airlinewriter
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