DAL - Airline bookings weaken slightly on softer pricing corporate pullback

2023-03-27 08:27:05 ET

One of the first indications of possible weakening of airline demand arrived on Monday. U.S. airline bookings fell -3.0% vs. 2019 for the week that ended on March 19 to worsen from the -1.2% pre-pandemic comparison for the prior week, per credit and debit card data from Bank of America. The firm said the decline was driven by pricing (+9.5% vs. 2019 compared to +12.3% last week), while volume actually showed a modest improvement (-11.5% vs. 2019 compared to -12.0% last week). It is believed that the regional banking headlines could be driving a near term softening in booking trends, with the data indicating corporate channels are softer than leisure channels. Bookings through leisure channels were mostly unchanged for the last week, while net sales in large corporate and SME channels decelerated.

Analyst Andrew Didora thinks any further bookings weakness could put Q3 estimates on airlines at risk. Earlier in the month, airline stocks fell after the round of guidance updates that came in alongside monthly traffic reports landed on the conservative side.

Sector watch: American Airlines ( AAL ), Delta Airlines ( DAL ), Southwest Airlines ( LUV ), United Airlines ( UAL ), JetBlue ( JBLU ), Hawaiian Holdings ( HA ), Alaska Air Group ( ALK ), Allegiant Travel ( ALGT ), Spirit Airlines ( SAVE ), Mesa Airlines ( MESA ), SkyWest ( SKYW ), Sun Country Airlines ( SNCY ), and Frontier Group ( ULCC ).

See Seeking Alpha Quant Ratings across the airline sector ranging from the highest (Deutsche Lufthansa) to the lowest (Hawaiian Holdings).

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