United Airways shares rise regardless of Delta variant attributable to constructive prospects for demand
A United Airlines Boeing 737-800 and United Airlines A320 Airbus as seen approaching San Francisco International Airport, San Francisco.
Louis Band | Reuters
United Airlines shares rose more than 2% on Wednesday morning after the airline forecast that the rebound in travel demand will continue over the coming months.
United reported their sixth consecutive quarterly loss after the market closed on Tuesday. But the airline’s losses are shrinking and the airline said bookings continued to improve, even for hit segments like business travel and long-haul international travel.
United CEO Scott Kirby told CNBC’s “Squawk Box” on Wednesday that the fast-spreading Delta variant of Covid-19 did not affect bookings, and repeated similar comments from Delta Air Lines CEO last week.
However, the spread of the variant could cause a temporary “retreat” in the reopening of the economy, but said it will be temporary “if it happens,” Kirby said during a conference call.
Kirby told CNBC that the US should lift an entry ban for most non-US citizens entering from the UK and the European Union, restrictions that have been in place since March 2020.
“We’re not going to stop the Delta variant from coming to the United States by closing these borders because it’s already here,” said Kirby.
United and other airlines and travel companies have repeatedly urged the Biden government to lift restrictions, but peak travel season is over with no change to the US. However, several European countries such as Greece, Spain and Italy have reopened their borders to visitors. also from the USA.
Kirby said the ban had a “human element”. “There are families who haven’t seen each other in 18 months,” he said.
A White House spokesman told CNBC that government officials from the US, UK, EU, and Mexico and Canada continue to meet to reopen travel, but did not say whether authorities are close to a decision.
On Monday, the State Department and Centers for Disease Control and Prevention raised their warnings of UK travel to the highest level, urging citizens to avoid traveling there.
Other airline stocks also rose on Wednesday, continuing to rebound from a sharp drop on Monday.
American Airlines and Southwest Airlines, which report quarterly results ahead of the market opening on Thursday, gained around 2% each. Delta was also up about 2%.