United Airlines expects its core cash burn to be positive this month for the first time since the Covid-19 pandemic began a year ago.
That news, offered by CEO Scott Kirby at the J.P. Morgan Industrials Conference Monday, was among several bullish reports offered by airlines as vaccinations continue to improve the outlook for travel.
"We have long-term optimism and confidence in the strength, durability and the velocity of the recovery," Kirby said.
Related report: United Airlines bets on international bounce
United defines core cash burn more narrowly than outright cash burn. The metric does not include items such as debt principal, severance payments and investments in recovery. So Kirby's statement doesn't mean the carrier has reached profitability. In the fourth quarter of last year, for example, United's daily cash burn was $33 million while its core cash burn was $19 million.
United wasn't the only carrier to report a substantial improvement in cash burn Monday as bookings improve and the booking window begins to extend beyond the 14 or less days that has become customary during the pandemic.
Delta president Glen Hauenstein told the virtual J.P Morgan conference audience that cash burn for March will be "at or pretty darn close to breakeven." And Southwest estimated in a regulatory filing that average core cash burn during the first quarter will be between $10 million and $12 million per day, down from its previous estimate of $10 million to $15 million.
American CEO Doug Parker, meanwhile, rebutted a question at the conference about the company's large debt load, which now exceeds more than $40 billion, by noting that American has reduced long-term annual structural costs over the course of the pandemic by $1.3 billion, far more than the $500 million to $600 million increase it has taken on in net annual interest expense.
The various reports followed the largest weekend of throughput at TSA checkpoints since the start of the pandemic, with more than 3.9 million people being screened between Friday and Sunday. Those figures, though, remained well down from the same weekend in 2019, when more than 7.4 million people passed through TSA checkpoints. In addition, the number of airline tickets sold by U.S. travel agencies during the week that ended Sunday remained 56.5% below 2019 levels, according to ARC.
Still, Hauenstein said that bookings for flights more than 60 days away are down just a few points below 2019 levels at Delta. And various carriers predicted that ticket prices, which the Bureau of Labor Statistics said were down 25.6% year over year in February, should rise as traffic and load factors increase.
Hauenstein also hinted that Delta would unblock middle seats prior to the summer, offering new revenue opportunities for the carrier with very little additional expense.
"That is going to be a very powerful lever for us," he said.