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American Airlines cancels 1,800+ flights, citing labor issues and weather

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Yahoo Finance’s Brian Sozzi and Emily McCormick discuss American Airlines canceling more than 1,800 flights last weekend due to labor shortage.

Video Transcript

EMILY MCCORMICK: Welcome back to Yahoo Finance Live. And it's time now for our anchor takes, the part of the show when Brian and I break down some of the big stories catching our eyes this morning. And Brian, I know you're watching the airlines and, specifically, American Airlines, which has become the latest to undergo a slew of cancellations over the weekend.

And as you reported in your Morning Brief this morning on the Yahoo Finance website, the cancellations had been pretty sizable, or about 14% of American Airlines's schedule just yesterday alone. So based on your reporting and what you've been watching, Brian, what's causing some of these disruptions?

BRIAN SOZZI: It's a labor shortage. And as I mentioned in the tease, Emily, it was a terrible weekend for American Airlines. Consumers already don't like this airline amongst many others, but they really do not like American Airlines. And they're making their voices heard on Twitter because some of the responses to these cancellations has been absolutely brutal all weekend long.

But as I mentioned in the Morning Brief newsletter from Friday through the afternoon Sunday, American Airlines canceled about 14 and 1/2% of its flights, seeing some new news out this morning, though, that those flight-- that ratio approach I believe closer to 20%.

Now American is telling me that they expect the situation to improve today. So for those stranded at various airports, maybe you actually get to get home within the next three days. And really, I think look at this situation. You know, we had our producer Pam Granda who was traveling. That is video from her of what has happened to American Airlines this weekend here. She's trying to get back to where she was, but again, American Airlines seeing labor shortages.

Now, whether that's because of vaccine pushback, it doesn't matter at this point. The fact is they are seeing labor shortages. They cut a lot of workers like other airlines during the height of the pandemic. And they're having problems finding those bodies to bring back to service this demand. And as I mentioned in the newsletter, Emily, I think these airlines, this is a sign of what could happen during the holiday travel season because you're going to see likely an influx of demand.

October already saw a comeback in demand for the airlines, a new wave of demand. And you don't necessarily have the employees to move bags, check people in, et cetera. So it could be a pretty ugly travel season for many airlines. And I know it's something we'll be talking about in the 11 o'clock hour with our travel series. You know, we'll be talking to the CEO of Southwest. We'll be talking to Hilton CEO. They all need workers to really help drive and bring profitable results to their bottom line. Got to have those bodies in there.

EMILY MCCORMICK: Absolutely, Brian. And of course, the sort of disruptions that we've been seeing at American Airlines over the weekend really echo what we've been seeing from another of these-- really, several of these carriers over the past couple of months. Southwest, of course, canceling some 2,000 flights over the past couple of weeks, also blaming bad weather, potentially some of those labor supply shortages also weighing across the airline industry as a whole here.

But I think to your mention about the holiday season, really, we're seeing these sorts of labor shortages, as well as supply chain constraints on multiple fronts, impacting industries across the board. I mean, we think about retail and the fact that those companies are going to be needing to add staff as well to keep up with demand here. We think about some of these fulfillment centers as well.

It really bodes to the fact that this is going to be a holiday travel season, and holiday shopping season, that's going to be really challenging for consumers as companies continue to try to bring this supply side of their equation in line with the elevated consumer demand that we've been seeing since the reopening really took place in earnest this past spring. So, as you mentioned, we will certainly be watching closely, Brian.

But one other thing that I also want to highlight as well here for my take, Brian, has been about the movie industry. So definitely a different story here if we think about some of the results we've been seeing recently on this front. I'm looking at shares of Cinemark Holdings, as well as AMC, moving higher this morning. And that's after we got some encouraging signs on theater attendance for October.

Now, last month was the highest grossing month for movie theater tickets so far in 2021. And that's according to comm score. Now, specifically, October generated about $637 million in ticket sales in the US and Canada. And as of yesterday, we saw that the domestic box office had brought in $3.1 billion in ticket sales through the first 10 months of the year. Now that's 45% higher than what we saw over the same period in 2020, but still 66% behind what we saw in 2019.

So we certainly are off the worst points that we'd seen during the pandemic. And again, we are seeing those theater operator stocks moving higher as a result of that. But just taking a look at what had really fueled this in October had been a pretty strong content slate in terms of the shows that had been released in theaters.

We had the new James Bond film, "No Time to Die." We had the new "Venom" film, "Halloween Kills," as well as "Dune," which I actually saw in person myself, Brian, in New York City. And I was pretty shocked at the attendance that I saw in person at that theater, which had been an AMC in Midtown. So, overall, some green shoots here for the movie theater. Certainly not back to those pre-pandemic levels, but some optimism here on the theater side, Brian.

BRIAN SOZZI: Oh, "Dune," I will definitely put that on my list. Emily, are you a popcorn or candy person in the movie theater?

EMILY MCCORMICK: I'm definitely a popcorn person. I feel like I like having a big bowl of something to be able to munch on throughout the course of what had been for "Dune," a three-hour film. So, bullish on popcorn, Brian.