Travel Recovery Supported by Delta, American Airlines Earning Reports

Airline stocks rose Wednesday (April 13) following a report of a “rebound” from Delta and indications from American Airlines that its earnings will be higher than expected.

“With a strong rebound in demand as omicron faded, we returned to profitability in the month of March, producing a solid adjusted operating margin of almost 10 percent,” Delta CEO Ed Bastian said in the company’s earnings report.

“As our brand preference and demand momentum grow, we are successfully recapturing higher fuel prices, driving our outlook for a 12 to 14 percent adjusted operating margin and strong free cash flow in the June quarter.”

American Airlines, meanwhile, said that its first-quarter revenue, while still below pre-pandemic numbers, would probably surpass Wall Street expectations due to strong travel demand. As the Associated Press reported, the airline said revenue would likely be down 16% from two years ago, a bit better than the 17% difference it had previously predicted. The airline also noted it was contending with rising fuel prices and labor costs.

Learn more: From Cruise Lines to Airlines to Tan Lines, the Travel Recovery Is On

The news comes in the wake of numerous recent reports by PYMNTS showing an uptick in demand and activity related to travel.

For example, Carnival Cruise Line announced earlier this month that the period between March 28 and April 3 was the “busiest booking week in the company’s history, showing a double-digit increase from the previous record 7-day booking total.”

The company, the planet’s largest cruise line, said in a news release that it has 23 ships in service, with Carnival Splendor joining the fleet May 2. Next year, the company says it will add yet another cruise ship to its fleet, this one sailing from the Texas port of Galveston.

“By year-end 2022, Carnival will have more capacity sailing (as measured by ALBDs — available lower berth days) than it was sailing in 2019,” the release added.

Meanwhile, the latest Mastercard SpendingPulse™ data released April 6 confirmed the trend, showing a 44.8% year-over-year increase in airline spending in March, while restaurants and lodging also grew significantly, up a respective 19.1% and 46.4%.

And while COVID-19 continues to make the news, our research suggests consumer travel desires outweighed fears of infection last quarter, with travel spending in January rising 33% compared to the previous month.