Home Stock U.S. airlines cut Q3 guidance as COVID cases surge again

U.S. airlines cut Q3 guidance as COVID cases surge again


United Airlines Holdings Inc (NASDAQ: UAL) said on Thursday it no longer expects to pull out of adjusted pre-tax losses in its fiscal third quarter as rising COVID-19 cases were hurting bookings. Peers American, Delta, and Southwest airlines also issued similar warnings.

Airlines’ stocks, however, are still trading up on Thursday.

United Airlines might trim capacity further

United Airlines have remained in a loss since the start of the pandemic. Earlier this year in July, it expressed confidence that easing COVID-19 restrictions will see it return to adjusted pre-tax profit in Q3 and beyond.

Now that the delta variant is hurting demand again, however, the air carrier expects its revenue to take a hit, making it harder to pull out of losses. It might also trim capacity further in the upcoming months if bookings continue to lay low.

American Airlines expects a broader decline in Q3 sales

American Airlines Group Inc (NASDAQ: AAL) now forecasts its Q3 sales to come in 28% lower than the 2019 equivalent, versus a 20% decline estimated earlier. Profit margins, it added, will also fall shy of the previous forecast.

Last month, Southwest Airlines also confirmed that cancellation rates were climbing due to the recent surge in the COVID-19 cases.

Delta Air Lines to still report a profit

On the flip side, Delta Air Lines Inc (NYSE: DAL) continues to believe it will report a pre-tax profit in the current fiscal quarter. Its revenue, however, will come in at the lower end of the predicted range, as per its CEO Ed Bastian.

Delta currently reports demand at close to 40% of 2019 levels. But Bastian is confident that the delta variant is only a hiccup, and demand will pick up eventually.

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