Airline bookings start to tumble again as coronavirus cases spike
Near-term bookings at United’s hub in Newark were only 16% of 2019 bookings through July 1. Just a few weeks earlier, United’s bookings were down “only” 33% from a year earlier. Although United would not release the details of the briefing being given to its employees this week, it confirmed the facts detailed in the Journal’s report.
Other airlines aren’t commenting on their bookings. But other airlines’ bookings are probably also falling as Covid-19 cases increase, said Philip Baggaley, chief credit analyst for airlines at Standard & Poor’s.
“It certainly could be a jagged recovery,” he said. “The initial surge in bookings, there was probably some pent-up demand in there. There’s no doubt that the increase in [Covid-19] cases and quarantines throws a monkey wrench into it.”
He said travel to the New York area, as well as Florida, Texas and Arizona will be particularly hard hit.
The airlines already received $25 billion in aid from the first part of the act. This new round of loans could end up totaling another $25 billion. The airlines have until September 30 to decide to close on the new loans. Delta, Southwest and United said Tuesday that they have yet to make a firm decision on whether they will need the additional federal help. Baggaley predicted some airlines will not take the additional loans.
“No one has ruled it out certainly,” he said.
Recent signs of returning demand
But with the surge in Covid-19 cases and signs of a drop in bookings, airlines that added flights may have gotten ahead of themselves. They could soon be flying mostly empty planes and running up losses once again.
Airlines for America reports that 39% of the planes in the US airlines fleets remain grounded and they are operating only 46% of their normal flights. Earlier this spring well over half the planes were grounded and schedules had been cut by 70% to 80%.
United will be sending notices of potential layoffs to employees, the Journal reports. Airlines are not allowed to have involuntary job cuts until October 1 under terms of the federal aid they received.
— CNN’s Gregory Wallace contributed to this report