Airline Shares Gain on Hopes of Coming to Grips With Omicron
Investing.com
Published Jan 04, 2022 06:37AM ET
By Dhirendra Tripathi
Investing.com – Airline shares traded higher in premarket Tuesday as diminishing concerns about the impact of Omicron and a truce with telecom companies overcame the headwinds confronting the sector.
United Airlines (NASDAQ:UAL), American Airlines (NASDAQ:AAL) and JetBlue Airways (NASDAQ:JBLU) were up 1% each while both Delta Air (NYSE:DAL) and Southwest (NYSE:LUV) gained 0.8%.
While daily infections touched a record 1 million Monday in U.S., that hasn’t as yet resulted in higher hospitalizations in most places, giving rise to hopes that Omicron won't overwhelm healthcare systems and cause damaging lockdowns. Concerns about the new mutant have ebbed for other reasons too -- with approvals to boosters and two oral drugs in place.
However, Covid-related absenteeism led thousands of additional U.S. flights to be canceled Monday. Tuesday is expected to be no different with Delta planning to cancel an additional 200 flights on the day after cancelling 4% of its schedule the previous day, according to The Wall Street Journal.
American Airlines cancelled 5% of its schedule Monday and United Airlines 6%.
The disruption would have been more severe had the telecom companies not agreed to delay the rollout of a new 5G service. The airlines had threatened to sue the wireless carriers if they went ahead with the launch plans. That prospect will have to wait for at least two weeks.
In the event of telecom firms going ahead with the rollout, the Federal Aviation Administration had prepared to issue flight restrictions that would have hampered both passenger and cargo flights in the country. That prospect is off the table for now while aviation regulators try address safety concerns at airports arising from the use of new frequencies by 5G carriers.
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Written By: Investing.com
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