American Airlines Follows Southwest in Warning of Hit From Virus Variant

(Bloomberg) -- American Airlines Group Inc. joined other U.S. carriers in warning that the delta variant of Covid-19 is slowing sales and leading travelers to cancel flight reservations, pushing August revenue below the company’s expectations. 

The carrier also is preparing for a more “muted” uptick in business travel into the fourth quarter, but isn’t yet ready to change its financial guidance, Vasu Raja, American’s chief revenue officer, said Wednesday at an industry conference. 

The comments add to mounting evidence that higher caseloads threaten to derail a U.S. travel recovery. Southwest Airlines Co. said on Aug. 11 that the decline in demand tied to the coronavirus resurgence may make it difficult to report a profitable third quarter, while JetBlue Airways Corp., Spirit Airlines Inc. and Frontier Airlines also have commented on softening demand and canceled bookings. Summer travel demand peaks this month.

“This has been, and we expect will continue to be, a very choppy recovery,” Raja said at the Raymond James Financial Inc. conference.

American and other carriers benefited from a jump in summer leisure travel by consumers who spent more than a year staying close to home and then rushed to take vacations or reunite with family and friends. But the surge in cases caused by the variant -- and decisions by more companies to delay full reopenings of their offices -- may push out a vital recovery in U.S. business travel. 

“How and when businesses come back to offices will be meaningful,” Raja said. “We’re anticipating a certain level of business demand.”

The outlook for winter-holiday travel “remains incredibly strong,” he said.

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