Please ensure Javascript is enabled for purposes of website accessibility

Is the Pandemic Over? Airlines Seem to Think So

By Lou Whiteman - Mar 15, 2021 at 1:44PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Cash bleeds are slowing as travel returns.

After a rough 2020, the airline industry is signaling clear skies ahead going into the spring and summer travel season.

On Monday, industry execs were making the rounds at a J.P. Morgan investment conference, and the message was by and large upbeat. Delta Air Lines (DAL 5.78%) CEO Ed Bastian warned that while the airline was likely to post a "large loss" in the current quarter, bookings have picked up in the last five weeks as the vaccine rollout gained momentum.

March revenue is coming in about 40% higher than February, and the month is "at or pretty darn close to breakeven" in terms of cash burn, Bastian said.

Airplanes parked at an airport.

Image source: Getty Images.

The tone was similar from others. United Airlines Holdings (UAL 6.94%) CEO Scott Kirby said his company expects to halt cash burn in March and continue the positive trend. And American Airlines Group (AAL 6.88%) said it has seen "a real uptick" in bookings, with the last three weeks the best for ticket sales since the pandemic began.

The data from the Transportation Security Administration also suggests a rebound in travel demand. The TSA screened more than 1 million passengers on Sunday, the fourth consecutive day when screenings exceeded 1 million. That hasn't happened since mid-March 2020, before the pandemic fully took hold in the United States.

Though the airlines are on the mend, a full recovery is still expected to take time. Most of the initial demand surge is expected to be leisure travel, and not more-lucrative business travel. Given the uneven vaccination rates around the globe, international traffic is also likely to lag.

The airlines also took on billions in new debt during the pandemic, and will need time to repair their balance sheets before focusing on post-downturn expansion.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
$40.83 (5.78%) $2.23
United Airlines Holdings, Inc. Stock Quote
United Airlines Holdings, Inc.
$46.07 (6.94%) $2.99
American Airlines Group Inc. Stock Quote
American Airlines Group Inc.
$17.24 (6.88%) $1.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.