The airline industry could be showing some signs of life as the airlines report slower ticket cancellations and more bookings on some routes.
But the spike in share prices because of it, experts caution, doesn’t mean that things are close to pre-pandemic levels, though.
Delta Airlines, for example, is restoring around 100 June flights to its schedule, which will help slow its reductions in revenue to $40 million by the end of the month. Things could break even for Delta by the end of the year, Reuters reported.
Delta CFO Paul Jacobson said it was unsure if people wanted to fly at all with the pandemic still ongoing. He said it could be around three years before things return to normal for airlines.
American Airlines said any excess cash for the time being would have to go toward paying off debt for the next five years, as the company has the highest debt load of any major U.S. airline after spending money on renovating its fleet.
Southwest Airlines also reported a slight improvement, saying its June schedule would be around half-capacity from what it was in 2019. That’s still an improvement over the 60 to 70 percent reduction in services predicted during the beginning of the pandemic. The airline expects to soon have about a $20 million daily cash burn, according to the news service.
The travel industry was particularly decimated by the pandemic as people took heed of governmental warnings to stay home.
Airlines have reported a tremendous surge in cancellations as of late, exponentially higher than usual, as the government had to step in and remind airlines to honor their refund rules.
But Flywire’s Colin Smith notes that the recovery will depend on how things unfold in the coming weeks, noting that airlines’ olive branches to customers, like more flexible refund policies, could help them in the end.
A panel of experts estimated that trust could be the key in maintaining customers even as social distancing exists — those airlines that customers can access easily, not wait on the phone too long to talk to, and get what they need quickly, will find themselves benefiting from customers as the future unfolds.
