US Airlines Shares Rise To Pre-pandemic Levels Thanks To Hopes Of Vaccines | Aviation News
United Airlines said it plans to end its cash consumption in March, earlier than expected, while the CEO of Delta Air Lines said the carrier was “ cautiously optimistic ” about the possibility of stop its own consumption of cash this spring.
U.S. airlines on Monday pointed to concrete signs of an industry recovery as a pandemic downturn drives spring and summer leisure bookings, pushing stocks to their highest level since the coronavirus crisis hit. hit the area a year ago.
“I think we are near the end of the virtual world,” Scott Kirby, managing director of United Airlines, told a JPMorgan conference.
Airlines executives said the acceleration of U.S. vaccinations against COVID-19 has exceeded the number of positive cases, which are on the decline.
As a result, people are booking vacations and visiting friends and relatives, helping to slow the pace of expected first-quarter income declines, they said.
Shares began to drop dramatically on February 21, 2020, as the pandemic spread, reaching a low on May 14 and gradually rising since then to the current high.
United Airlines said it plans to end its cash consumption in March, earlier than expected. In January, United said an average daily core cash consumption of $ 19 million in the fourth quarter would likely continue into early 2021.
The positive trend in core cash consumption is expected to continue after March, assuming the current trajectory for reservations remains in place, Kirby said. United are the first to say they could hit the industry cash-consuming milestone.
United shares jumped 7% in midday trading. The Dow Jones US Airlines index rose more than 3%.
Delta Air Lines is “cautiously optimistic” about the possibility of stopping its consumption of cash this spring, said CEO Ed Bastian.
Delta said it will use cash for second-quarter aircraft purchases and expects its decline in first-quarter revenue to be at the bottom of its forecast, down 60 to 65 percent from in the same quarter in 2019, before the start of the pandemic.
Southwest Airlines estimated lower first-quarter cash consumption and lower-than-expected operating revenue decline for March, although CEO Gary Kelly warned at a Washington Post conference that business travel will remain depressed and may never return to pre-pandemic levels.
JetBlue Airways also forecast a slower decline in revenue in the first quarter, projecting a decline of between 61% and 64% from the same period in 2019. It had previously forecast a decline in revenue from 65% to 70%.
American Airlines, the most indebted U.S. airline, has said it is no longer looking to raise financing after a $ 10 billion debt deal last week and expects to have more than $ 17 billion in cash. at the end of March.
More than 1.3 million passengers were screened at U.S. airports on Friday and Sunday, according to Transportation Security Administration data – the highest number since the pandemic crushed air travel in 2020.