Wall Street analysts believe the four largest U.S. airlines – Delta (DAL), United (UAL), American (AAL) and Southwest (LUV) – will lose 50-60% of their revenue from COVID-19 as they struggle with unfathomable demand shock and restricted travel conditions. Many analysts also point out the risk of a structural change to corporate travel going forward as companies reevaluate their return on travel expenses since many businesses have adapted well to working remotely.
The most optimistic analyst estimates are forecasting that it will take the four largest U.S. airlines until 2022 for sales to recover back to 2019 levels, while the average analyst estimates show it may take until 2024. The most bearish analysts believe it could take even longer.
Wall Street expects that once COVID-19 is more under control, travel demand will gradually recover and be led by pent-up demand for leisure travel. Temperature checks, enhanced cleaning, socially distanced boarding, masks and other precautions may be used in efforts to restore consumer confidence in the safety of flying. Some airlines are also removing middle seat passengers to create more physical separation on board and effectively capping a flight’s maximum load factor, which analysts forecast will be between 62% to 70% this year for the four largest U.S. airlines, according to a consensus by Visible Alpha.
Learn more about how to assess company performance and KPIs for the airlines industry here.
This content was created using Visible Alpha Insights.
Visible Alpha Insights is an investment research technology platform that provides instant access to deep forecast data and unique analytics on thousands of companies across the globe. This granular consensus data is easily incorporated into the workflows of investment professionals, investor relations teams and the media to quickly understand the sell-side view on a company at a level of granularity, timeliness and interactivity that has never before been possible.