U.S. airlines see signs of life after travel collapse

Bookings outpacing cancellations, reservations show ‘improvement’

United Airlines Holdings Inc. and Southwest Airlines Co. are reporting modest gains in demand, suggesting the beginnings of a rebound from an unprecedented collapse in April because of the coronavirus pandemic.

Bookings are again outpacing cancellations, Southwest said in a regulatory filing Tuesday, and travel reservations for next month are showing “modest improvement.” United reported “moderate” strengthening in the U.S. and on some international routes.

The nascent signs of recovery bolster the outlook for a comeback of sorts — however slow it may be — after consumers all but stopped flying in April because of the virus outbreak and government travel restrictions. Delta Air Lines Inc. said Monday it would restart 100 flights in June, including on such routes as New York to Paris and Atlanta to Cancun, providing a hint that demand is poised to inch up.

Carriers still caution that the revenue environment remains uncertain for an industry that has already received $25 billion (U.S.) in government payroll aid during the worst crisis in airline history.

United fell 1.86 per cent to close at $23.68 in New York following a 21 per cent surge in a broad rally Monday that was spurred by positive news about an experimental coronavirus vaccine. Southwest rose 2.21 per cent to close at $27.69.

Modest gains

Operating revenue this month will likely decline no more than 90 per cent from a year ago, slightly better than the previous forecast of a drop of as much as 95 per cent, Southwest said.

The percentage of seats filled per plane should average between 25 per cent and 30 per cent, compared with about eight per cent in April.

The Dallas-based carrier earlier projected the figure would be no more than 10 per cent in May.

The forecast for capacity remains down as much as 70 per cent from last year’s level.

Southwest also issued its first outlook for June, forecasting that operating revenue would drop as much as 85 per cent and that capacity would decline as much as 55 per cent. Its load factor was projected to be 35 per cent to 45 per cent.

United said scheduled capacity in July would fall 75 per cent from last year.