By Rajesh Kumar Singh

CHICAGO (Reuters). Despite predicting a rebound in passenger traffic in March, American Airlines (NASDAQ;) and United Airlines announced Thursday that they expect a return to normal service in March. They had suffered a blip due to Omicron coronavirus variant. But the carriers warned that this would not happen because of the current wave in the health crisis.

American based in Texas said that while ticket sales have not returned to pre-Omicron levels yet, they are improving “quickly” following a drop of “considerably” during early December.

Chicago-based United also stated that cancellations and bookings are returning to their normal levels. This week, the carrier reported that its bookings were 25% lower than the same week in 2019. That compares to a 48% decline in January’s first week.

On an earnings call, Andrew Nocella, Chief Commercial Officer at United, stated that Omicron will have a significant impact on February and January.

Nocella stated that Omicron, and any future Omicron variants on carrier revenue would likely be less than the Delta coronavirus variant.

Rival Delta Air Lines (NYSE) predicted last week a quick recovery from demand slump.

United, encouraged by improved bookings, expects to report profits in the third, fourth, and fifth quarters of the year.

American expects profitability to rebound in March.

According to the company, domestic leisure and international short-haul traffic are approaching 2019 levels. However, long-haul international demand remains challenging.

According to the report, domestic business travel, which was responsible for 30% in 2019 revenue of the company, has recovered to around 70% of pre-pandemic levels.

American said that travel demand volatility due to the COVID-19 variations has caused “the most challenging planning environments in the history commercial aviation.”

CAPACITY: LOWER; COSTS: HIGHER

Both carriers will match their capacities with the bookings trends.

American anticipates that its capacity for the March quarter will be about 8%- 10% lower than in the comparable period of 2019. The full-year capacity will be about 5% less than it was in the year before the pandemic.

United’s 2022 capacity will be less than it was in 2019. Instead of increasing 5% like earlier estimates.

According to estimates, both airlines are likely to experience higher costs due to lower capacity and less aircraft utilization as a result of delayed demand. They are being squeezed by rising fuel costs, higher wages, and more expensive training.

United’s expenses this year will be more expensive than those in 2019. American officials estimate that the cost of United’s 2022 costs would rise by 5% compared to its pre-pandemic years.

United posted an adjusted loss in December quarter at $1.60 per share, as compared to a loss last year of $7.00 per shares.

American lost $1.42 per shares in the third quarter, as compared to a loss that was $3.86 per shared a year ago.