North American Airlines Announce Slower Ticket Cancellations And Improved Demand


Two major US airlines and Air Canada said Tuesday that ticket cancellations are slowing and demand has been showing signs of improvement since the coronavirus pandemic caused global travel to stop last month.

Southwest Airlines Co and United Airlines Holdings Inc shares rose on the news.

The Southwest, focused on the US domestic market, said it was adding some flights in June, bringing the overall annual drop in capacity this month between 45% and 55%, less serious than the drop in 60% to 70% of May. in May.

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Chicago-based United, which has greater international exposure, said capacity in June would still be down about 90% year-over-year and 75% in July. Travel abroad is expected to be slower to recover.

“We might have hit bottom in the short term. But are you better soon? Until vaccination, travel patterns will not return to normal anytime soon, “said Burton Hollifield, professor of financial economics at the Tepper School of Business at Carnegie Mellon University.

All airlines remain focused on reducing costs.

Southwest said its daily cash consumption rate was slowing to $ 20 million in June, from $ 30 million to $ 35 million in the second quarter.

Speaking at an industry conference, Air Canada chief financial officer Mike Rousseau said he could not predict when his airline’s liquidity would run to zero, noting that it would depend revenue performance in the coming months.

United said its total adjusted capital spending for 2021 would be close to $ 2 billion compared to about $ 4.5 billion this year, falling below $ 500 million in 2022 when it does not plan to take delivery of brand new plane. It plans to deliver fully funded aircraft this year and next.

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