Airlines warn of delta variant’s impact on travel

The leading U.S. airlines on Thursday said that the recent spike in COVID-19 infections has slowed down bookings, acknowledging that the delta variant has stunted the industry’s recovery. 

In a regulatory filing, United Airlines said that it no longer expects to turn a profit in the third quarter and announced reductions to its flight capacity following weak August bookings. Other industry giants, including American Airlines, Delta Air Lines and Southwest Airlines, also lowered their revenue expectations.

Delta variant fears scared off some travelers in recent weeks, leading to reduced flight bookings in August and on Labor Day weekend after airlines enjoyed huge demand in July.

On Wednesday, the Transportation Security Administration screened roughly 1.4 million air travelers, down from 2 million during the same day in 2019. 

Still, airlines noted that leisure travel remained strong through most of the summer and expressed confidence that the recent decline in air travel is a momentary roadblock, not a long-term problem. 

“While the environment remains choppy, booking trends have stabilized in the last 10 days and the recovery is expected to resume as case counts decline,” Delta Air Lines wrote in a filing Thursday. 

Airlines are closely following COVID-19 cases, hopeful that the recent spike is nearing its peak and will begin to decline soon. 

“[The] current spike in cases has been significantly less impactful to date than prior spikes and is expected to be temporary in nature,” United Airlines wrote in a memo to investors Thursday. “Based on demand patterns following prior waves of COVID-19, the Company expects bookings to begin to recover once cases peak.”

Airlines have relied on leisure travel, along with billions of dollars in federal pandemic assistance that expires at the end of this month, to buoy their revenues. International travel is still limited, and business travel has not returned as airlines had hoped, with many corporate offices pushing back their reopening plans due to the delta variant surge.