CNBC has reported that U.S airlines are beginning to see an increase in demand as the summer vacation season approaches.
While a full recovery still appears some time away, Southwest Airlines reported that new bookings were outpacing cancellations this week, a turning point in the coronavirus pandemic which has had an enormous effect on the airline industry.
The carrier, based in Dallas, has logged a “modest improvement” in demand and new bookings for June, Southwest plans to reduce its capacity by up to 55% next month, with flights being around 35% to 45% full.
“The revenue environment remains uncertain and may require additional capacity reductions depending on passenger demand,” it said in a filing. Southwest’s shares gained 2.2% to end at $27.69.
While demand is still far from last year’s levels for the summer period, things are improving. Southwest forecast a 90% drop in May revenue compared with 2019. The carrier previously expected a decline of up to 95%. It expects revenue in June to fall 80% to 85%.
United said on Tuesday that it has logged “a moderate improvement in demand” for trips within the United States and some international destinations in the rest of the second quarter. It plans to cut capacity by 75% in July from a year ago.
United “plans to continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand.”
American Airlines said during the investor conference that its planes are flying about 35% full, an increase of 15% from April.
Delta Airlines’ net sales are up moderately thanks to a rise in domestic bookings in June and July.
Airlines across the world still remain cautious, as the pandemic has provided them with major challenges. Delta is planning to increase international travel next month, but will only do so subject to government approval.
While it seems some time before we see ‘normal’ again, the above provides a glimmer of hope that air travel can begin to resume, perhaps sooner than we thought.
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