Near-term bookings at United’s hub in Newark were only 16% of 2019 bookings through July 1. Just a couple weeks earlier, United’s bookings were down “only” 33% from the year earlier in the day. Although United would not release the details of the briefing being given to its employees this week, it confirmed the reality detailed in the Journal’s report.
Other airlines are not commenting on the bookings. But other airlines’ bookings are likely also falling as Covid-19 cases increase, said Philip Baggaley, chief credit analyst for air companies at Standard & Poor’s.
“It certainly could be a jagged recovery,” that he said. “The initial surge in bookings, there was probably some pent-up demand inside. There’s without doubt that the increase in [Covid-19] cases and quarantines throws a monkey wrench engrossed.”
He said travel to the New York area, as well as Florida, Texas and Arizona will be specially hard hit.
The air companies already received $25 billion in the help of the first the main act. This new round of loans could find yourself totaling yet another $25 billion. The air companies have until September 30 to decide to close on the brand new loans. Delta, Southwest and United said Tuesday they’ve yet to make a firm decision on whether they will require the additional federal help. Baggaley predicted some airlines wont take the excess loans.
“No one has ruled it out certainly,” he said.
Recent signs of returning demand
But with the surge in Covid-19 cases and signs of a drop in bookings, air companies that added flights could have gotten in front of themselves. They could soon be flying mostly empty planes and running up losses once again.
Airlines for America reports that 39% of the planes in the US air companies fleets remain grounded plus they are operating only 46% of these normal flights. Earlier this spring more than half the planes were grounded and schedules have been cut by 70% to 80%.
United will undoubtedly be sending notices of potential layoffs to employees, the Journal reports. Airlines aren’t allowed to have involuntary job cuts until October 1 under terms of the federal aid they received.
— CNN’s Gregory Wallace contributed to this report