Is the Worst Over? Southwest, United Airlines Report Improvement in Bookings, Fewer Cancellations

Most airlines believe that demand for tickets would once again go up once the country starts reopening

Two of United States' largest passenger carriers — Southwest Airlines and United Airlines — said on Tuesday that demand for tickets were showing signs of recovery and cancellations were slowing. Southwest Airlines also said that it has recorded more ticket bookings than cancellations so far this month.

The latest updates are signs that travel is again picking up with businesses reopening and the worst of the COVID-19 induced travel slump might be behind us. The airline industry has been one of the biggest casualties of the coronavirus pandemic with travel coming to a standstill as governments locked down counties to contain the spread of the coronavirus.

Ticket Booking on the Rise

Southwest Airlines
Southwest Airlines expects to sell only 25 per cent to 30 per cent of the seats in May Pixabay

Southwest and United Airlines said on Tuesday they are pulling back on the deep cuts in their current schedules because of improved bookings. Although the improvement is modest, both the airlines said that it is a good sign that people have once again started flying. This is for the first time in weeks that flyers are booking more flights than cancelling.

Air travel in the United States saw almost zero demand for tickets as millions stayed indoors on fears of coronavirus. Southwest Airlines, which is more focused on the U.S. domestic market, said that it will add some flights in its June schedule, which will bring the month's overall annual capacity decline between 45 per cent and 55 per cent. May's decline was between 60 per cent and 70 per cent.

However, despite an uptick in bookings, United Airlines, which focuses more on the international market, said that recovery will be slower. United's June and July capacity will still be down 90 per cent and 75 per cent, respectively, year over year.

Airlines Try to Bounce Back

U.S. airlines registered losses of over $2 billion in the first quarter Pixabay

The U.S. airlines have been badly bruised by the coronavirus pandemic, with the industry needing a $25 billion bailout to keep operating. However, with the economy reopening people have gradually started booking trips. United expects demand for both domestic flights and certain international destinations to improve for the remainder of the second quarter of 2020. Southwest Airlines said it expects to sell only 25 per cent to 30 per cent of the seats on its greatly reduced schedule of flights in May.

U.S. airlines registered losses of over $2 billion in the first quarter, although the decline in traffic started only in the first half of March after the government imposed stay-at-home orders. The second quarter is expected to be even more difficult, with forecast of bigger losses.

Major airlines have lost 50 per cent or more of their market value so far this year due to the coronavirus pandemic. Experts believe that if traffic does not return by Fall, some of the carriers might run into liquidity issues. However, signs of improvement are also showing, which is going to become better as more of the nation reopens business. The number of passengers passing through TSA checkpoints at U.S. airports has also improved this month.

Related topics : Coronavirus