What’s going on?

3 of America’s biggest airlines (United Airlines, American Airlines, and Southwest Airlines) warned that a rise in coronavirus cases will impact profits this winter.

What does this mean?

• The Delta variant has been on the rise in the US, which is likely to put everyone off their vacations, which is apparent through the way reservations decline and cancelations rise in August.
• Moreover, airline’s most profitable customers, who are business and international travelers, are also having no reasons to travel.

Why should I care?

The bigger picture: Global supply chain issue

Although the Delta variant keeps spreading and government support starts slowing down, America’s stocks have been so high (they have risen non-stop since the start of 2021 to hit record highs) that Deutsche Bank (IB) has warned that a selloff is coming.

Zooming out: Right event, wrong time for airlines

China (world’s biggest exporter) announced that it would sell oil from its reserves to the global market, which would boost supply and lower raw material costs (i.e, fuel costs) for airlines. The decision comes as a measure as China’s inflation surged to a 13-year high, which puts pressure on the country’s manufacturers.

Content source: Finimize (2021) Cancel Culture. Available at: https://www.finimize.com/wp/news/cancel-culture-2/ [Accessed on Sep 11, 2021]