American Airlines Says August Revenue Weaker Than Expected Because of Rise in Covid Cases

Mike Blake | Reuters
  • Frontier, Southwest and Spirit previously warned new Covid cases are driving down bookings.
  • American said July revenue came in ahead of forecasts but is weaker than forecast in August.

American Airlines on Wednesday said August revenue is coming in lower than expected as a rise in Covid cases drives down bookings, the latest carrier to warn about the impact of infections on sales.

"This has been and we expect will continue to be a very choppy recovery," Vasu Raja, American's chief revenue officer, said during a Raymond James investor conference.

Raja said that July revenue came in ahead of the airline's expectations but that the increase in Covid cases has led to weaker near-term bookings and higher cancellations. He added that end-of-year holiday bookings have been strong.

The carrier joined Southwest Airlines, Frontier Airlines and Spirit Airlines in warning about lower bookings amid a rise in Covid cases.

"Given the fluidity of the current demand environment we are not ready to make definitive adjustments to our capacity plans or guides at this point in time," Raja said.

The Transportation Security Administration said it screened 1.47 million people at U.S. airports on Tuesday, the fewest since May 25. Travel demand often slides later in August as summer vacation season winds down.

Business travel generally picks up in the fall. Some companies are delaying a return to offices, however, raising questions about how quickly business travel will recover.

"We do anticipate that there will be a...slower recovery in business demand than what we've seen, but there will still be a recovery in business demand," Raja said. He added that end-of-year holiday bookings have been strong.

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