US airlines anticipate different summers as demand recovers

America’s two largest airlines are taking diverging views on the rebound in travel as the summer holiday season kicks off with more travellers passing through US airports than at any time since the pandemic took hold.

The US Transportation Security Administration reported that almost 2m people flew at the start of the Memorial Day holiday weekend on Friday, the highest number of travellers on any day since March last year.

In all, 7.1m people flew between Friday and Monday — fewer than the 9.7m who travelled for the same US long weekend in 2019, but more than five times the number who flew in 2020.

In a bet that the rise is a sign of things to come, Texas-based American Airlines, the number one US carrier by passenger miles flown, has increased capacity for June and July to only slightly below 2019 levels.

The number of seats that American is selling is 7 per cent fewer in June this year than the airline sold in 2019, according to the aviation data company Cirium, and only 5 per cent lower in July.

United Airlines, the number two carrier by passenger miles, which has a more extensive international exposure than American, has scheduled 30 per cent fewer seats this month than it did in June 2019. The Chicago-based company is selling 20 per cent fewer seats in July than in the same month two years ago.

“Schedules reflect differences in geographical exposures and strengths in addition to varying levels of aggressiveness or conservatism by managements,” said Savanthi Syth, an analyst at Raymond James. “American has definitely been more aggressive on recovery expectations relative to Delta and United. However, they have also benefited from greater exposure to domestic [routes].”

Jon Jager, an analyst at Cirium, noted that United historically has fewer summer flights than American or Delta Air Lines and also has the highest percentage of international flights among the three largest US carriers. With many countries still restricting tourism from overseas, United is not flying passengers from small cities to its hub airports for transfers to international flights.

“There is a lack of international passengers to support their domestic flying,” he said.

United said that “throughout the pandemic, and as we begin to recover, [the airline] has continued to operate a network schedule to match capacity with demand”.

Cirium’s data also shows that the two airlines both flew roughly the same proportion of their scheduled capacity during the pandemic, a period where many carriers advertised flights to test the market but ultimately pulled the most unprofitable flights.

United flew 80 per cent of its scheduled flights in 2020, while American flew 77 per cent of them. In 2021 both airlines have flown 99 per cent of their scheduled flights.

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