Airlines Industry-July 13th

TSA Checkpoint

With every TSA summary I have written so far, there has been a new traffic high. This week, however, has been the first time the previous week performed better than the current week. The high this week was 755,555—9206 lower than the previous week’s high. While this could just be chalked up to abnormal traffic patterns following July 4th, the recent spike in COVID-19 cases could also be playing a role in this plateau. See the “In the News” section for more speculation from industry experts.

FAA Reports (Updated Monthly)

FAA released an email recently stating that it will not require people to wear masks, nor will it require airports to enforce social distancing.

The FAA flight stats for month of may have been released, and as of the month of May, flights aren’t seeing any signs of recovery. The month of April was where the sharp decline in flights ended, with an average of only 680 flights per day out of Atlanta. For reference, April of last year averaged 2,522 flights daily. May showed no improvements with an average of only 607 flights out of Atlanta daily (once again the one year ago average was just above 2500).

Delta Airlines

Delta stock fluctuated slightly this week, dipping down to $25.30 at its low and $28.49 at its high. Delta airlines is going to be the first airline to release their Q2 report this year, on July 14th. Analysts aren’t optimistic about this earnings call, with speculations of around 80-90% revenue decrease from last year. Delta’s debt is also expected to total $23.5 Billion this quarter, according to BARRON’S, which will surpass their market cap at $16.4 Billion. See the “In the News” section for more speculation from industry experts.

In the news

Delta Will Be the First Airline to Report Second Quarter Earnings This Week

Daren Fonda

The losses will be large: Revenues are expected to be down more than 85% across the industry and not a single major carrier is expected to report positive earnings per share. But the stocks are likely to move on airlines’ commentary and forecasts for a recovery in the fall and winter of 2021.

United Airlines Has a Huge Warning for Airlines

Adam Levine-Weinberg

However, the strong rebound of the past few months isn’t going to continue. Earlier this week, United Airlines (NASDAQ:UAL) showed investors convincing evidence that the nascent recovery in air travel demand is already running out of steam.

During the first two weeks of June, about 22,000 new COVID-19 cases were reported in the U.S. on a typical day, according to The New York Times. For comparison, the U.S. has averaged more than 50,000 new cases per day over the past week. Additionally, the COVID-19 death rate is starting to increase again.

Unsurprisingly, the uptick in cases is denting air travel demand. TSA throughput has continued rising in recent days (albeit more slowly than last month), but United Airlines revealed on Tuesday that airline industry bookings leveled off in June and decreased significantly toward the end of the month.

A chart showing a drop-off in bookings for United Airlines in late June

Photo of an undetermined Georgia Tech home game during the 1918 college football season. That's when the sport was hit by the Spanish flu and the end of World War I.

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