Airline stocks are at multi-year highs, despite the chaotic run up to the holiday period of July 4.
United experienced major delays after rolling thunderstorms struck its Newark, New Jersey hub.
Airlines have shrugged off the flight disruptions that piled up in airports across the country before the Fourth of July weekend.
Between June 24 and July 2, more than 63,000 flights, or 30%, of the schedules operated by U.S. Airlines were delayed. Over 9,000 flights, or 4.2% of their schedules, were cancelled. Flight tracking site FlightAware says that both of these percentages are higher than the disruption averages for this year.
Delays were caused by rolling thunderstorms, as well as other factors like a lack of air traffic control in the congested airspace surrounding New York and other regions. This led to thousands of passengers having their travel plans derailed. This event shattered what had been a relatively calm spring for travellers.
The high demand for travel continues to drive airline stocks up.
Several of these have reached multi-year heights.
Transportation Security Administration reported screening nearly 2.9 millions people on Sunday. This is a record number of screenings in a single day. The demand for air travel is at an all-time high, with passengers booking flights and using rewards points to make up lost time following the Covid pandemic.
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Delta Air Lines
Recently, many people have raised their eyebrows.
Bookings are strong. The industry continues to benefit from lower fuel prices compared to last year.
In mid-July the airlines will release their second-quarter financial results. They will also provide a look at the full summer ahead, which will include the impact of the disruptions in late June and early-July.
Airline stocks rise
The stock market gains of major U.S. carriers this year have been far greater than the overall market.
Delta and American Airlines are both up 46% this year so far through Monday. Comparatively, the
The same period has seen a 16% increase in the number of passengers. Delta and United recently reached their highest levels since the summer of 2021.
The collapse of the 2022 year-end led to the collapse of.
This year, grew by 10%.
Even during the last week, when travel chaos affected operations, many airline shares topped the S&P 500. United Airlines was the exception. Stocks of United Airlines dropped by 1.7% while the airline struggled to stabilize operations as storms continued to roll through Newark Liberty International Airport.
FlightAware reports that from June 24 to July 2, United Airlines had the most delays among U.S. carriers. It accounted for 42% on its mainline schedule.
Scott Kirby, CEO of the Federal Aviation Administration, said that the Federal Aviation Administration slashed departure rates at Newark at the beginning of last week, which caused a pileup of delays. Arriving flights are unable to park when planes cannot depart. This can lead to a snowball effect of delays.
Kirby, in an interview with the Associated Press, said that "Airlines like United aren't built to have their biggest hub severely restricted for four consecutive days while still operating successfully."
Note to Staff
He said that the airline would have to reduce their schedule at Newark during spring and summer storm season in order to avoid a pile-up, unless the airport has more capacity.
It is difficult to predict thunderstorms for airlines, as they are unpredictable and can appear without warning.
Many airlines delay flights rather than cancel them, waiting for the storms to pass and the airspace to be opened up. However, crews may reach their federally mandated workday limit, causing further disruptions.
David Neeleman is the founder and former CEO
Breeze Airways CEO, and said that there is not much an airline can do with such drastic cuts in airline arrival rates.
He said that airlines could cancel flights proactively if the weather improves.