Analysts Say Rise in Domestic Flights Will Help Airlines Weather Omicron

In an insightful story from the Wall Street-centric MarketWatch website, stock analysts say that U.S. airlines should be able to weather the Omicron variant and its subsequent travel restrictions due to robust domestic bookings.

So far, the travel ban enacted by the U.S. and more than a dozen other countries on eight southern African nations is limited to long-haul flights to a specific region.

“We would not expect to see the same fall (as the delta variant) with this outbreak, as stocks were already trading at the lowest levels since February 2021,” Sheila Kahyaoglu, an analyst with the firm Jefferies, wrote in a note to clients. “We continue to think that airline balance sheets are not at risk and will be able to navigate the impact of a variant’s effect on air travel.”

Airlines are coming off a huge Thanksgiving holiday that approached the kind of traffic numbers not seen since 2019. Almost 21 million people took to the air for the 10-day holiday period.

That resurgence of domestic travel is helping to buffer the airlines since “at least for the time being omicron is (only) impacting long-haul international travel to some specific markets,” Peter McNally, an analyst at Third Bridge, told MarketWatch.

Added Baird analyst Peter Arment: “(Omicron is) a minor disruption at the moment.”