Airlines have a long way to go to climb out of the crater left by the pandemic, and the first three months of 2021 didn’t do much to improve the situation.
Three of the largest U.S. carriers, American Airlines, Delta and United, all reported heavy losses for the first quarter. Ultra-low-fare carrier Spirit was also in the red, while Southwest was the only major carrier to turn a profit, mostly because of government assistance.
Yet there is hope on the horizon, or so company executives have stressed in conference calls with investors this week. Some airlines are seeing more bookings. American and JetBlue are adding flights. Delta is ordering more new planes, positioning itself to help customers “reclaim the joy of travel,” an executive stated.
Airlines are also trying to power a turnaround by increasing staffing. While American disclosed that it is bringing back pilots that were “recalled” during the pandemic and adding more, data from Thinknum shows that several other major airlines are also in a sustained hiring mode.
Job listings at United, Southwest, JetBlue and Spirit all marched upward through April after prolonged hiring freezes last year, according to Thinknum data. American was a little ahead of the curve in terms of hiring, adding more jobs starting in August 2020 and hitting a peak on March 17 with 111 job listings.
Still, it continued to lead the pack for job openings on April 19. On that day, American had 81 job listings posted, while United had 61, JetBlue had 67, Spirit had 65 and Southwest had 17.
This trend shows cautious optimism after the coronavirus all but crushed the travel industry last year. After lockdowns and travel restrictions were imposed around the world starting in early 2020, airlines took massive hits, laying off thousands of employees. Hiring for new positions was also more or less non-existent across most major airlines from April 2020 through July 2020, according to Thinknum.
Meanwhile, the number of Apple app store ratings for Alaska Airlines, United and Southwest have slightly increased through April, indicating more use by customers, according to Thinknum data. Spirit, which recently introduced a redesigned app, saw a massive surge in ratings.
U.S. airlines collectively lost about $35 billion in 2020 as a result of the pandemic, and it lost billions more in the first quarter.
Delta last week reported a net loss of about $1.2 billion for the first three months of the year, while this past week American disclosed a first-quarter loss of $1.3 billion, United reported a loss of $1.4 billion, and Spirit reported a loss of $112.3 million. Southwest yesterday reported quarterly profits of $116 million, although it would have suffered a loss of about $1 billion if not for an offset for salaries, wages and benefits made available under the CARES Act. Other airlines also got help from the CARES Act, but it wasn’t enough of a boost to get them into the black.
JetBlue is expected to release its results for the quarter on Tuesday.
Airline executives have generally pointed to March as a possible turning point for the market, saying that they’ve seen demand starts to improve. With vaccines becoming more widespread and wanderlust setting in, bookings have started to return to something close to 2019, executives told investors in conference calls. With demand returning, bargains on ticket prices may also start to disappear.
"While acknowledging that the recovery is still in progress and may not be linear, we continue to believe we will be among the first U.S. carriers to reach sustained profitability,” Spirit President and CEO Ted Christie said in a statement.
All that said, airlines are still likely to face challenges, as new coronavirus variants spread and the pandemic continues to ravage parts of the globe. On Thursday, the U.S. State Department expanded its “Do Not Travel” list to 115 countries, up from 33 countries last week, according to NPR. The advisories were largely due to “a very high level of COVID-19.”
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
