US Air Travel Stumbles in December After Year of Recovery

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US Air Travel Stumbles in December After Year of Recovery
Credit: © Reuters.

(Bloomberg) -- As 2022 draws to a close, a growing number of US airlines are finding that travel demand isn’t holding up quite like they expected.

Delta Air Lines Inc (NYSE: DAL ). on Wednesday became the latest carrier to hint at a lackluster December as it narrowed a revenue projection for the fourth quarter. It still sees strong results in 2023.

“The December month was the off-trend month,” Delta President Glen Hauenstein said at an event for analysts and investors in New York. “January will be significantly better than December. February will be better than January, and March better than February.”

The comments echoed those from smaller rival JetBlue Airways (NASDAQ: JBLU ) Corp., which said a day earlier that “the expected very strong close-in demand for December reflected in its prior outlook has materialized below expectations.” Similarly, Alaska Air (NYSE: ALK ) Group Inc. this week flagged a “modest softening in corporate travel bookings.”

Read more: JetBlue Tumbles After Warning of Weaker-Than-Expected Demand

The warnings raise questions about the strength of the rebound in air travel, after relaxed restrictions around Covid-19 and pent-up demand helped fuel a recovery from early in the pandemic. A Standard & Poor’s index of the largest US airlines is up about 22% this quarter.

Delta insists December will be merely a blip in the overall recovery. As Chief Executive Officer Ed Bastian said at the New York event, there is “sustainable, strong demand we’re going to see for an extended period of time.”

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© Bloomberg. Travelers at Terminal 5 at John F. Kennedy International Airport (JFK) ahead of the Thanksgiving holiday in New York, US, on Wednesday, Nov. 23, 2022. Planes and airports are expected to be bustling this Thanksgiving, traditionally one of the most traveled holidays of the year. Photographer: Michael Nagle/Bloomberg

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