Airline investors appeared to shrug off thousands of U.S. flight cancellations over the holidays even as disruptions continued on Monday.
Carriers scrubbed more than 1,700 U.S. flights on Monday on top of more than 5,400 over the weekend, driven largely by severe winter weather that hobbled some of the country’s busiest airports. The disruptions were resolving, however, with about 250 flight cancellations set for Tuesday.
Over the holidays, carriers including Delta Air Lines, United Airlines and JetBlue Airways said crews were increasingly out sick from the fast-spreading omicron variant of Covid. The Federal Aviation Administration also warned about delays as its staff increasingly tested positive for the coronavirus.
From Christmas Eve through New Year’s Day, airlines canceled more than 13,000 flights, or 5.6% of schedules, according to flight-tracking site FlightAware. That spiked to more than 12% of flights on Saturday as a winter storm hit the Midwest.
Airline shares, however, were higher in premarket trading, a sign investors are looking ahead to the rest of the year, when travel demand is expected to rise.
The cost of the disruptions isn’t yet clear. The holiday period was crucial for carriers whose executives expected some of the busiest days since the pandemic began.
The variant could present a “modest, near-term risk” for airlines due to staff quarantines and the potential that some customers delay trips, wrote Citigroup airline analyst Stephen Trent on Monday.
“Nevertheless, higher vaccination rates and emerging anti-viral treatments are just some of the factors that could make negative, knee-jerk stock price reactions to the emergence of future variants look increasingly unreasonable,” he said.
American, United and Alaska were each up close to 1% in premarket trading. Shares of Southwest Airlines, which canceled hundreds of weekend flights, were up 0.5%.
Delta kicks off the sector’s quarterly earnings reports on Jan. 13.