CNBC’s Phil LeBeau joins ‘Squawk on the Street’ to report on the latest wave of flight cancellations hitting major airlines to start 2022. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
Airline investors shrugged off thousands of U.S. flight cancellations over the holidays even as disruptions continued on Monday.
Carriers scrubbed more than 2,100 U.S. flights on Monday on top of more than 5,400 over the weekend, driven largely by severe winter weather that has 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.
United, Spirit and Alaska are among the airlines offering crews extra pay to pick up trips.
From Christmas Eve through New Year’s Day, airlines canceled some 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 morning trading, a sign investors are looking ahead to the rest of the year, when travel demand is expected to rise. American and United were up more than 4% apiece in early afternoon trading. Delta and Alaska were 3% higher.
Shares of Southwest Airlines, which canceled hundreds of flights over the past few days, were up more than 2%. The Dallas-based airline scrubbed another 440 Monday flights, or 12% of its schedule, according to FlightAware. Southwest said bad weather left planes and crews out of position, with some employees unable to work at a regular pace.
“Canceling hundreds of flights causes disruption across our operational system,” the airline said Monday in a statement. “The storm has cleared Denver, for example, but the extreme cold requires additional safety protocols for our People working outside there, slowing the operation, causes delays and forcing some cancelations to keep the entire system moving.”
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 omicron 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.
Delta kicks off the sector’s quarterly earnings reports on Jan. 13.
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Originally published at https://www.youtube.com/watch?v=A-8Q4CSsuTk
