Categories Analysis, Industrials

LUV, AAL, UAL, ALK: How did Q2 turn out for the airline industry?

American expects its total revenue for Q3 2021 to be down approx. 20% versus Q3 2019

The airline industry has been recovering at a healthy pace and concerns over the COVID delta variant have not been able to dampen the encouraging travel trends. The widespread distribution of vaccines and easing of restrictions is helping this recovery. A number of airline companies reported their second quarter 2021 earnings results this week. These included United Airlines (NASDAQ: UAL), Southwest Airlines (NYSE: LUV), American Airlines (NASDAQ: AAL) and Alaska Air Group (NYSE: ALK). Here’s a look at their respective performances:


United Airlines reported operating revenues of $5.5 billion, which was down 52% from the second quarter of 2019. Revenues of Southwest Airlines dropped 32.2% to $4 billion from the same period in 2019. American Airlines’ operating revenues gained 368% to reach $7.5 billion in Q2 2021 compared to Q2 2020. Alaska Air Group also saw its revenue grow 263% to $1.5 billion in the second quarter of this year compared to the second quarter of 2020. All the aforementioned airline companies, with the exception of American, beat market estimates on revenue.  


United Airlines reported an adjusted loss of $3.91 per share while Southwest Airlines delivered an adjusted loss of $0.35 per share. American Airlines reported an adjusted loss of $1.69 per share and Alaska Air posted an adjusted loss of $0.30 per share. All these airliners, barring Southwest, beat earnings expectations.

Demand trends

On its quarterly conference call, United said the delta variant had not put a dent in its bookings and the company anticipates the recovery in demand to continue unabated for the most part. Demand is picking up faster than expected for leisure and business travel domestically. Although international borders are yet to open up completely, the company anticipates similar patterns when they do at some point.

Business travel picked up in June for United going from being down over 90% versus pre-pandemic levels for the most part of the second quarter to down about 60% at present. The company expects business travel to be down about 40-45% versus 2019 by the end of the third quarter. A survey by United indicates that over 90% business customers plan to resume traveling in the second half of this year.  

Southwest also saw a surge in demand for leisure travel. Leisure passenger traffic in June rebounded above 2019 levels and based on current bookings, leisure passenger traffic for July is expected to trend higher than the levels seen in the same month in 2019. Although business revenue continues to lag leisure revenue, the improvement seen in business revenue during Q2 is encouraging and business bookings are improving at a steady pace.


For the third quarter of 2021, United expects growth in total revenue per available seat mile to be positive compared to the same period in 2019. Southwest expects operating revenue to be down 10-15% in July and 12-17% in August compared to the same periods in 2019. American expects its total revenue for Q3 2021 to be down approx. 20% versus Q3 2019.

Click here to access the transcripts of the latest earnings conference calls of these airline companies

Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!

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