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Business across the board lost money the last two years, regardless the size. Losses happened in a variety of ways. For airlines, flights and services are cut back or they don’t happen at all. Staffing shortages caused by both illness and vaccine mandates forcing people out doesn’t help. At some point, if you want to keep operating, you have to give somewhere. It’s up to each business as to where that’s done.
American Airlines losses
This airline took an almost $1 billion hit, a setback of $931 million in the last quarter of 2021. The latest COVID variant is stalling a faster return to normal after almost two years.
When comparing to the first quarter of 2019, income is expected to be down maybe as much as 22% this year. CEO Doug Parker will be retiring this spring. He said before COVID there was high demand for travel but once COVID hit, planning was a huge challenge.
Stock market losses too
Both Parker and incoming CEO Robert Isom spoke to employees, “Our results were significantly improved over 2020, but the impact of the omicron variant has affected the timing of a full revenue recovery.” The airline losses last year were pretty bad, almost $2.2 billion so there has been some improvement.
American Airlines is based in Fort Worth, TX. Their losses in shares were $1.42, close to a FactSet survey of $1.46. Analysts also forecast their revenue pretty closely. The forecast was $9.34 billion, actual revenue was $9.43 billion.
Holiday travel eased losses
Thanksgiving and Christmas helped but both COVID and winter storms had staff calling in sick or flights had to be grounded. Other airlines reported losses too. United Airlines lost $464 million. COVID took a bite out of their flights as well and probably will continue to do so for at least this first quarter. Their losses forecast is expected to be roughly the same, as much as 25%. Delta Airlines’ losses were $408 million.
Delta CEO Ed Bastian wasn’t expecting bookings to improve til the end of February. COVID will keep their first quarter less than wonderful as well. Helane Becker is an airline analyst for Cowen. She said there’s enough uncertainty about travel to keep people grounded. Helane told clients, “Consumers have a difficult time booking international trips with any certainty given changing rules and testing mandates.”
