What’s Going On Here?Southwest Airlines posted better-than-expected earnings on Thursday, and the world’s biggest budget carrier is confident it’ll be going places come June. What Does This Mean?Now that the vaccine rollout is well underway, it’s only a matter of time before Americans get back to doing what they do best: filling their Instagrams with posts of them leaning against faraway monuments. Southwest Airlines announced that domestic leisure travel bookings are on the rise, not to mention that the number of flights will look much the same in June 2021 as it did in June 2019. Incidentally, June’s also when the airline is expecting to stop burning through cash and finally break even again. Add to that a smaller-than-expected loss last quarter, and it’s easy to understand why investors initially sent its shares 3% higher. Why Should I Care?For markets: Budget airlines could take off quicker than big carriers.
American Airlines posted strong results on Thursday too, which might’ve come as a relief after bigger-than-expected losses at industry-leaders United Airlines and Delta Airlines earlier this month. But while all three big carriers sound more upbeat about the future, it might be budget airlines like Southwest – with a business model focused on frugality, domestic flights, and leisure travel – that lead the aviation industry’s post-pandemic recovery.
The bigger picture: European airlines don’t have so much to look forward to.
According to fresh analysis by one major airline organization, a slower-than-expected global inoculation is holding back international travel. It reckons the delay will cost airlines $10 billion more than predicted, putting the industry at risk of a $48 billion shortfall this year. Still, US airlines stand to come out of it the best: the country’s rapid vaccination rollout and major domestic market means they’re expected to have the smallest losses relative to sales – while Europe’s fumbled efforts will put its airlines at the bottom of the pack. | 
