Airline pilots walk over Ronald Reagan Washington National Airport in Arlington, Virginia on December 27, 2021.
Anna Money Maker | Getty Images
Airline investors shrugged thousands of dollars Flight cancellations over the holidays, even if disruptions worsened on Monday.
Airlines scrubbed more than 2,900 U.S. flights on Monday, in addition to more than 5,400 over the weekend, largely due to the severe winter weather that has handicapped some of the country’s busiest airports from Seattle to Washington DC and a spike in Covid -Infections among flight crews. Operations appeared to be improving, however, with 306 flight cancellations scheduled for Tuesday.
Over the holidays, including porters Delta Airlines, United Airlines and JetBlue Airways Said crews were increasingly sick from the rapidly spreading Omicron variant of Covid. The Federal Aviation Administration also warned of delays as their employees increasingly tested positive for the coronavirus.
Delta said it expects to cancel about 200 flights a day out of about 4,000 daily departures on Tuesday and Wednesday.
From Christmas Eve through Tuesday, airlines have canceled more than 18,700 US flights, according to FlightAware. More than 12% of Saturday’s scheduled flights were canceled when a winter storm hit the Midwest, and nearly 11% of Sunday flights were also scrubbed.
But airline stocks rebounded on Monday, a sign that investors look to the rest of the year when travel demand is expected to rise. American shares rose 4.4% to $ 18.75, United gained 3.9% to close at $ 45.49, and Delta rose 3.1% to end at $ 40.29.
Shares in Southwest Airlines, which canceled hundreds of flights in the past few days, rose 2.7% to end the day at $ 44. The Dallas-based airline canceled another 605 flights, or 16% of its schedule, on Monday, according to FlightAware. Southwest said bad weather had dislocated planes and crews and some employees were unable to work at a regular pace.
“The cancellation of hundreds of flights is disrupting our entire operating system,” the airline said in a statement on Monday. “The storm cleared Denver, for example, but the extreme cold requires additional security protocols for our people working out there, slowing operations, causing delays and forcing some cancellations to keep the whole system moving.”
The cost of the disruptions is not yet clear. Vacation time was critical for airlines, whose executives anticipated some of the busiest days since the pandemic began.
The Omicron variant could pose a “modest, short-term risk” for airlines due to staff quarantines and the potential for some customers to delay travel, Citigroup airline analyst Stephen Trent wrote on Monday.
“Even so, higher vaccination rates and new antiviral treatments are just a few of the factors that could make negative, knee-jerk stock price reactions to the advent of future variants appear increasingly unreasonable,” he wrote.
Delta publishes the sector’s quarterly earnings reports on January 13th.