US airline stocks have rebounded since mid-December on the prospect the next stage of recovery in travel is on the horizon.
Bank of America recently told clients that Delta Air Lines was a “buy” as the bank’s equity analysts expect a rebound in corporate travel. However, new data Monday shows headwinds are gathering as corporate travel bookings have plunged.
According to travel management company TripActions Inc., at least 32% of bookings for domestic business trips have been canceled, with the majority (61%) involving grounded flights. Many of the cancelations were in the first two weeks of January.
TripActions told Bloomberg the current cancellation rate for February flights is around 19%, revealing corporate travel plans are being upended due to an outbreak of COVID-19.
Further delays in return-to-office timelines will drag on airline and hotel bookings in the first quarter.
Corporate travel is central for a recovery in the overall travel industry. If white-collar workers aren’t allowed to travel, the recovery will remain dismal.