A United Airlines jetliner lifts off from a runway at Denver International Airport (AP Photo/David Zalubowski)
Airline stocks took a hit in Tuesday’s trading. Several well-known airline stocks were down in different levels, which including United Airlines Holdings was 8.5%, American Airlines Group was 5.5%, Delta Air Lines was 3.7%, JetBlue Airways was 4.5% and Spirit Airlines was 4.0%. So, what's going on?
In the global vaccination campaign, investors appear to see a clear path to recovery for airlines companies. However, United Airlines’s first quarter earnings report seems to remind investors that it will take more time for the revenues of airlines to pre-pandemic levels.
United Airlines's total revenues got a decrease of 59.6% year-over-year for the first-quarter 2021, and its adjusted loss per share was $7.5 in the quarter, which was worse than anticipated. Business and international travel were still down about 70% from pre-pandemic levels. United said it may take until 2023 before it generates margins that exceed 2019.
Of course, this is not only a problem for United. Currently, airlines mainly rely on domestic leisure travel, but vacationers usually need to pay lower fares, which is crimping revenue at United and other airlines, and international travel requires the lifting of virus-related restrictions, but this may happen until next year.
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