US airlines feel Delta variant impact

Only a few weeks ago, several US airline executives suggested that the Delta variant of the Covid-19 would have little impact on domestic air travel demand.

They were almost unsettled by the speed with which domestic travel recovered this year, and they couldn’t imagine anything throwing airlines off course.

However, as countries around the world are discovering, the highly transmissible Delta variant alters the game slightly.

“The company has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021, which are believed to be driven by the recent rise in Covid-19 cases associated with the Delta variant,” says Southwest Airlines.

That makes it difficult to be profitable in the third quarter, Southwest warns.

Frontier Airlines had been the first US carrier to acknowledge a booking impact from the Delta variant just a few days before.

Frontier then cited the variant’s challenges as it joined United Airlines in insisting that all of its employees be vaccinated against Covid-19.

Recent events in the United States serve as a reminder to airlines that, while they were correct to bank on the promised “pent-up demand,” a portion of that demand is still dependent on passenger confidence in the epidemiological situation.

However, if countries such as the United States follow the lead of other countries, a sharp increase in Covid-19 cases linked to the Delta variant may be followed by a relatively rapid decline in infections.

The hope is that highly vaccinated populations will dampen the virus’s impact enough to keep the recovery on track. The strong recovery of international air travel in Europe is cause for optimism in this regard.