The epidemic has not gone, the blizzard has come again, and the US aviation industry is once again in trouble

Until last year's Christmas holidays began, JetBlue executives had been confident.

Until the emergence of the new crown variant virus Omicron, where the company's headquarters are headquartered in New York, where confirmed cases lead the country, JetBlue airlines were quickly overwhelmed, with daily sick leave calls more than 4 times increasing, and flight cancellations on Christmas Day were 12%.

On Jan. 11, according to Reuters, U.S. airlines have canceled more than 30,000 flights since Christmas Eve, or about 7 percent of the total number planned, according to Reuters, one of the biggest disruptions in recent years.

Hit by the double whammy of Opmiqueron and extreme weather, American Airlines is grappling with the worst and most enduring mass cancellations of the past decade.

Double whammy

Christmas was supposed to be the peak season for travel in Western countries, but thousands of flights around the world were cancelled due to the rapid spread of Theomilon. From Christmas Eve alone to the day after Christmas, more than 6,000 flights were cancelled worldwide.

However, wave after wave, wave after wave. The United States has recently been hit by a rare blizzard. As a result, on the first day of the new year, thousands more flights in the United States were cancelled or delayed.

According to tripactions Inc., travel management firm, at least 32 percent of business travel bookings within the U.S. were canceled, most of them (61 percent) related to grounded flights. Many of the cancellations occurred in the first two weeks of January.

TripActions told Bloomberg that the current flight cancellation rate for February was about 19 percent, suggesting that U.S. business travel plans are being disrupted due to the fourth wave of outbreaks pushed by Omikron.

In addition, the U.S. aviation industry has been facing a labor shortage in recent months.

According to the latest statistics released by Johns Hopkins University in the United States, nearly 1.5 million new confirmed cases of new coronavirus were added in the United States on the 10th, setting a new high since the outbreak of the epidemic.

United Airlines CEO Scott Kirby said Jan. 11 that the rapidly spreading Ofmicron caused thousands of the company's employees to take sick leave, forcing the company to reduce recent flights.

Kirby wrote in an internal memo that nearly 1 in 3 employees in Newark, New Jersey, took sick leave. Currently, about 3,000 United employees are infected, or about 3.5 percent of its 85,000 employees.

Costs are rising

According to Reuters, air travel demand tended to cool down in the first quarter, which should ease airline staffing needs. Still, if they struggle to operate smoothly, their revenues could suffer.

"If the plane doesn't fly, the airline doesn't generate revenue." Peter McNally, head of the global division of industrial materials and energy at research firm Third Bridge, said.

Bank of America analysts see the impact of the pandemic on business travel as the biggest risk to the aviation industry.

For now, major airlines are preparing to weather the storm.

Southwest Airlines said it would provide compensation incentives, including up to double overtime, to employees such as flight attendants, customer service representatives and mechanics by Jan. 25.

United Airlines said it would offer three times the salary to pilots who could work for most of January. In addition, United Airlines flight attendants will also receive additional salary subsidies.

Reuters said all incentives, along with flight cancellations, are expected to further drive up costs in the industry, which have risen over the past year as a result of efforts to expand operations.

The market is optimistic

Although airlines are facing unprecedented difficulties, the market is still optimistic about the prospects of airline stocks.

On January 11, local time, U.S. airline stocks rose collectively: Boeing rose 3.19%, American Airlines rose 1.22%, Delta Air Lines rose 1.5%, Southwest Airlines rose 1.3%, and United Airlines rose 0.69%.

Morgan Stanley is bullish on U.S. airline stocks, predicting that U.S. airlines will resume normal operations in the second quarter of 2022 and will accelerate their recovery in the second half of the year and perform strongly in 2023. Morgan Stanley also upgraded its traditional airline ratings and is bullish on low-cost carriers.

Morgan Stanley analyst Ravi Shanker said airline revenue per mile is expected to exceed 2019 levels in 2023 if inflation continues to grow at its current rate.

Citi aviation analyst Stephen Trent said Opichron could pose a "modest short-term risk" to the airline due to the quarantine of crew members and the possibility that some passengers may delay travel. Higher vaccination rates and emerging antiviral therapies may offset the negative impact of Omilon on the aviation industry.

On January 13, before the US stock market, Delta Air Lines will release its earnings report, and analysts pointed out that this will become a forward-looking guide for the industry and has significant reference significance. Delta air lines revenue of $9.14 billion in the fourth quarter of last year compared to $3.97 billion in the year-ago quarter and earnings per share of $0.12 compared to a loss of $2.53 per share in the year-ago quarter.

United Airlines will release its earnings report after hours on January 19, Southwest Airlines will release its earnings report on January 27, and American Airlines will release its earnings report on January 28.

This article originated from the International Finance News