Air travel jumps as vaccinations spur vacation bookings, stocks surge

Key Points
  • Airline stocks surged Monday as carriers reported higher bookings and TSA screenings since Thursday rose to the highest volumes in a year.
  • Airline CEOs are becoming more optimistic as more travelers book vacations.
  • United said it expects its core cash burn to be positive in March.
A Delta Airlines Boeing 757-251 approaches Washington Ronald Reagan National Airport (DCA) in Arlington, Virginia on February 24, 2021.
Daniel Slim | AFP | Getty Images

Travelers are returning to the skies, fueling optimism among airline CEOs that the battered industry has finally turned a corner in the coronavirus pandemic. Airline shares rose to more than one-year highs Monday.

The Transportation Security Administration screened more than 1.34 million people on Sunday, 86,000 more people than the same day a year ago, shortly after the World Health Organization declared Covid-19 a pandemic.

That's still 45% below 2019 levels, a sign the industry still has a long way to go before recovering to pre-pandemic levels. But TSA screenings have topped 1 million every day since Thursday, the highest volumes in a year.

United Airlines' shares surged more than 8% on Monday to $60.94, the highest closing price in a little more than a year after the Chicago-based carrier said it expects its core cash burn, which strips out debt payments, to be positive in the first quarter. It had estimated in January that it would lose $19 million a day during the first three months of the year.

The Centers for Disease Control and Prevention warned that an increase in travel during spring break could lead to more Covid-19 infections. Airline CEOs noted that bookings aren't just picking up for the near term, but for the summer vacation season, generally the most lucrative for airlines.

United CEO Scott Kirby, who was the most pessimistic among airline chiefs a year ago when the pandemic began, expressed optimism on Monday about long-term travel demand.

"I think that there's going to be more travel going forward, just period," he said at a JPMorgan industry conference. "You've already bought a new washing machine, you don't have to buy another one. People already bought a new car, did a home repair. And it's going to mean a lot more available to spend in '22, '23, '24 for leisure demand."

Delta Air Lines' CEO Ed Bastian said the carrier will likely be "at or pretty darn close to breakeven for the month of March" thanks to stronger bookings, though the quarterly cash burn will average $12 million to $14 million in the first quarter, compared with an earlier range of between $10 million and $15 million.

Southwest Airlines said revenue trends are improving as it slightly lowered its forecasts for cash burn in the first quarter.

American Airlines has also logged an increase in vacation demand recently.

"Our last three weeks have been the best three weeks since the pandemic hit, and each week has been better than the prior one," CEO Doug Parker said at the JPMorgan conference. "And that appears to be continuing here into the fourth week of that period."

American Airlines CEO: Demand is improving as vaccination increases
American Airlines CEO: Demand is improving as vaccination increases

JetBlue Airways on Monday also said bookings have been on the rise this month as vaccinations against Covid-19 increased and more travelers plan vacations or to visit friends and family. The New York-based airline said its revenue decline in the first quarter compared with pre-pandemic levels wouldn't be as steep as expected.

JetBlue said it expects to post earnings before interest, taxes, depreciation and amortization of negative $490 million to negative $540 million during the first quarter, a smaller loss than the $525 million to $625 million loss it had previously forecast.

JetBlue's CEO Robin Hayes said the industry has "been in the emergency room for a year" and is now moving into "a recovery phase."

JetBlue gained close to 6% to end the day at $21.64, the highest in nearly three years. American rose close to 8% to $25.17, and Delta added 2.3% to $50.99, each more than one-year highs.

-CNBC's Noah Higgins-Dunn contributed to this report.

Spirit Airlines CEO on safety precautions the company is taking
Spirit Airlines CEO on safety precautions the company is taking