Airlines rally as US travel rebound quickens ahead of summer

U.S. airlines gained as the country’s three biggest carriers said a travel rebound is gaining steam.

The pace of recovery has been faster than expected, Delta Air Lines Inc. President Glen Hauenstein said Tuesday. United Airlines Holdings Inc. predicted it would turn a profit before certain items next quarter, while American Airlines Group Inc. said corporate trips and long overseas flights—the worst-hit segments during the coronavirus pandemic—are poised for improvement.

“Business travel and long-haul international are starting to show encouraging signs,” Derek Kerr, American’s chief financial officer, said at the annual Wolfe Research transport conference. “We’re encouraged by everything we’re seeing.”

The upbeat outlooks from all three companies validate expectations that a U.S. travel recovery will strengthen this summer as expanding vaccination rates prompt more Americans to fly again. Domestic travel yields, a measure of the average fare for each seat flown a mile, are expected to surpass the pre-pandemic levels of 2019 this summer, United said.

United jumped 4.4% to $58.62 at 9:46 a.m. in New York, the biggest gain on the S&P 500 index, followed closely by American and Delta. Cruise lines also rose amid optimism on travel.