Air travel recovery stalls

The troubling statistic in August for the travel industry isn’t that the number of people flying dropped compared with July. That’s normal as summer vacations end and people prepare for the return to work and school routines.

The worrisome figure is that August was weaker than July when compared to the same months in 2019. After months of travel inching closer to normal, August was a step backward.

This week, airlines painted the clearest picture yet of the fallout from the current surge in COVID-19 cases. Just about all of them scaled back forecasts for third-quarter revenue. United Airlines predicted a pretax loss that could extend into the fourth quarter. American hinted at a bigger loss than previously expected.

Interestingly, the wave of warnings triggered a rally in airline stocks on Thursday, as investors took heart in comments about the travel slump being temporary. Figures show that the surge in COVID-19 cases that started in July might be peaking.

Investors, however, need to brace for a few more months of weak traffic, interrupted by busy periods around holidays. A top United official warned that October, early November, and the period between Thanksgiving and Christmas will be especially slow.

Sources: FactSet; company filings David Koenig; J. Paschke • AP Worrying: The number of passengers flying in August was expected to nearly match two years ago but fell short. Industry officials are warning of a slow autumn.