Beginning Thursday, you’re going to be hearing a lot about the seemingly miraculous “recovery” of the U.S. airline industry, as the nation’s big carriers all try to downplay combined first-quarter losses of as much as $5 billion with tales of how many summer tickets they’re selling, how many planes and employees their putting back to work, and how busy the summer travel ahead is going to be.

Just remember to swallow it with a huge spoonful of sugar.

Recent travel booking and other data does, indeed, show that a reasonably large amount of pent-up travel demand soon will be loosed upon a travel industry that very much needs every customer, and every dollar it can get. But it’s going to be very tempting for consumers – and perhaps unsophisticated investors – to get carried away by all the hype that’ll be pouring out of the airline industry this month. Airlines, which continued to lose tens of millions a day through most of the first quarter, likely will still lose a little money daily through the second quarter. And only a lucky few stand a realistic chance of getting back to the actual break-even point, let alone all the way into the black, in the third and fourth quarters.

Full recovery – meaning and revenue totals return to levels last seen in 2019 – continues to be unlikely until probably 2025 (though a few aggressive analysts and industry experts suggest 2024 or even by late 2023 is possible). Indeed, Tori Emerson Barnes, executive vice president of public affairs and policy at the U.S. Travel Association, which lobbies for the airline, hotels, restaurants, conventions and attractions industries, testified before U.S. Senate subcommittee on Tuesday that full recovery is still likely to take five years. She also asked Congress to take steps quickly to lower restrictions on foreign travel to and from the United States and to take other actions to speed up the travel and tourism industries’ economic recovery.

Similarly, Willie Walsh, who took over as CEO of the International Air Transport Association, the industry’s global trade and lobby group on April 1, said last week in his first media briefing that the industry has a huge challenge in overcoming the near-total absence of international travel during the pandemic. “International passenger traffic is down almost 89%. And it’s showing no signs of recovery in the current environment,” said Walsh, who retired last year as CEO of IAG, the parent of British Airways, Aer Lingus and several other European carriers. Walsh previously was CEO of British Airways before he formed IAG as a trans-border holding company for multiple airlines, including Iberia. Walsh, an Irishman, also was CEO of a then-independent Aer Lingus before joining British Airways.

Beyond the clear and obvious problem – that travel demand continues to be historically restricted by the Covid-19 pandemic and all the formal travel restrictions and natural fears attached to it – the airline industry’s biggest economic problem is, and almost certainly will continue to be that the wrong people are buying airline tickets. Business travelers, who not only tend to travel far more frequently than leisure travelers but who also tend to pay much, much more for their tickets, are staying home. Their employers either are afraid of the liability costs should their employees contract Covid-19 while traveling, are too cash-poor currently as a result of pandemic-driven declines in sales to put their people back out on the road, or have learned to do business well enough without lots costly travel. So, for now and likely a while longer, they’re keeping their travel spending near to zero.

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United Airlines CEO Scott Kirby, speaking at a U.S. Chamber of Commerce event two weeks ago, said “Business demand is still down 80% (vs. 2019, before Covid-19’s arrival in the U.S.) and of course international borders, particularly long-haul, are still closed. So those are huge chunk(s) of our business that are still almost at zero.”

Of course, he said that while at the same time trying to hype the importance of the nice – but not overwhelming – pickup in demand for domestic leisure travel.  Kirby even said it is “almost entirely recovered.” But while the data do show a strong rise in demand from leisure travelers, that’s probably an overstatement.

The Transportation Security Administration’s daily airport checkpoint clearance totals began rising significantly in mid-March and reached nearly the 1.5 million travelers a day mark during the Spring Break travel period, and then again beginning Easter weekend. But that’s still 1 million to 1.2 million fewer passengers cleared a day than during the same period in 2019. A year ago, the number of daily TSA clearances fell below 100,000 a day on some days as the bottom fell out of demand during the early, panicked reaction to Covid-19.

And remember, while the current demand levels are by 1.4 million from last year’s dreadfully weak demand numbers, nearly all of those flying today are doing so at leisure prices. And even today’s leisure fare prices are, on average, down slightly from what they were in 2019.

As airlines line up to announce their first quarter results and talk about the outlook for the rest of the year, expect them to speak glowingly about the strength of leisure demand they expect this summer. Some also are likely to speak, very carefully, about how they might reach the break-even point, if you exclude certain items from the comparisons. But because conventional big U.S. airlines cannot cover their costs even if they fill every one of their available seats with passengers paying the average leisure fare, it’s very unlikely that they’ll report true profits, as defined under Generally Accepted Accounting Practices. Southwest Airlines, with it very different operating style and still somewhat lower costs, does have a shot a profitability in subsequent quarters this year, as do, perhaps, several so-called Ultra-Low Cost Carriers.

On Thursday, Delta will lead off the airlines’ first quarter reporting season. Analysts expect it to report that its firs quarter revenues were down $4 billion, or 53% from the first quarter of 2020, which got into two strong months before the pandemic began having a negative impact on travel. It’s expected first quarter loss is likely to be around $2.3 billion.

Most other carriers are expected to report next week. Notably:

·        United, reporting on April 20, has indicated in SEC filings that its first quarter revenues will be down 66% from the same period in 2019, or about $3.2 billion. That’s a little lower than analysts had been anticipating, and its stock price, as a result, fell more than 4% on Monday and rose less than 1% on Tuesday. The said its first quarter daily cash burn rate fell to $9 million a day, from $19 million a day in the fourth quarter.

·        American, reporting on April 26, in a filing on Tuesday, said its first quarter revenues were down 62% from the same period in 2019 and that its first quarter loss will be about $2.8 billion. The carrier also announced that it will defer delivery of 18 Boeing 737 MAX 8 planes from this year and next to deliveries now scheduled in 2023 and 2024. It also delayed delivery of Boeing 787 aircraft from this year to the first quarter of 2022.

·        Southwest also will report on the 26th. It’s coming off its first money-losing year in 48 years and is expected to post another loss in the first quarter. However, several analysts expect the carrier, which normally attracts a higher percentage of leisure travelers and a lower percentage of business travelers, to return to modest profitability ahead of the Big Three conventional airlines. Southwest will celebrate its 50th anniversary in business this summer.

·        JetBlue and Alaska airlines also both report on the 26th, are both expected to report first quarter losses but improving leisure travel demand for the summer ahead.

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