Airlines pilots walk through Ronald Reagan Washington National Airport on December 27, 2021 in Arlington, Virginia.
Anna Money Maker | Getty Images
Airlines investors have shrugged off thousands of holiday cancellations in the US even as the airline’s tough start to 2022 grows.
Airlines canceled more than 3,100 US flights on Monday — the largest daily total since February 15, according to airline data provider FlightAware. That was on top of more than 5,400 over the weekend, driven in large part by severe winter weather disrupting some of the nation’s busiest airports from Seattle to Washington, D.C., and an increase in COVID-19 cases among flight crews.
Operations appear to be improving, with 400 flights canceled on Tuesday.
During the holidays, airlines, including Delta Air Lines, United Airlines and JetBlue Airways, said cabin crews were becoming increasingly ill from the rapidly spreading Omicron of the Covid virus. The Federal Aviation Administration has also warned of delays, as its employees have been increasingly testing positive for the coronavirus.
Delta said it expects to cancel about 200 flights per day on Tuesday and Wednesday, out of about 4,000 daily departures.
United, Spirit and Alaska are among the airlines that have offered their crews extra pay to pick up flights to ease the disruptions.
From Christmas Eve through Tuesday, airlines canceled more than 18,700 US flights, according to FlightAware. More than 12% of flights scheduled for Saturday were canceled as a winter storm hit the Midwest and nearly 11% of Sunday flights were cancelled.
But airline shares rose on Monday, a sign that investors are looking forward to the rest of the year, when travel demand is expected to pick up. US stocks rose 4.4% to $18.75, United rose 3.9% to close at $45.49, and Delta shares rose 3.1% to close at $40.29.
Shares of Southwest Airlines, which has canceled hundreds of flights over the past few days, rose 2.7% to end the day at $44. FlightAware data showed the Dallas-based airline canceled another 605 flights on Monday, or 16% of its schedule. Southwest said bad weather had left planes and crews off-site, with some employees unable to work at a regular pace.
“Canceling hundreds of flights is disrupting our operating system,” the airline said Monday in a statement. “Storm has cleared Denver, for example, but the extreme cold requires additional safety protocols for our personnel working outside, which slows down the process, causes delays and forces some cancellations to keep the entire system moving.”
Regional airlines, which fly smaller planes for larger carriers, have also registered hundreds of cancellations. SkyWest dropped 379 flights, or 16% of its schedule, on Monday, and Republic canceled 26%, or 289. It plans to fly.
The cost of the disturbances is not yet clear. The holiday period was crucial for airlines whose CEOs had anticipated some of the busiest days since the pandemic began.
Stephen Trent, an analyst with Citigroup, wrote Monday that the Omicron variant could present a “modest near-term risk” to airlines due to staff quarantines and the potential for some customers to postpone flights.
“However, high vaccination rates and antiviral treatments are just some of the factors that can make unreasonable negative stock price reactions to the emergence of future variables seem increasingly irrational,” he wrote.
Delta begins quarterly earnings reports for the segment on January 13th.
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