BOSTON, Oct 8 (Businesshala) – American airlines are looking at the upcoming holiday season and reopening the crucial trans-Atlantic route to regain momentum lost after a resurgence in COVID-19 cases last quarter Can you
After a strong summer travel season, air-carriers last month had to temper their outlook for the quarter from September as the fast-spreading Delta version of the coronavirus slowed new bookings and led to cancellations.
A month later, the decline in COVID-19 cases has given the industry hope that passengers will have more confidence to fly again.
Financial services firm Raymond James analyzed 7-day average passenger screening data from the Transportation Security Administration, which showed that travel demand still peaked in late July, but improved in mid-September.
“Cancellations are down, bookings are recovering,” Peter Ingram, chief executive of Hawaii Holdings Inc. (HA.O), told Businesshala in an interview. “As we approach Thanksgiving and Christmas, we have the opportunity for a strong, solid recovery.”
Bookings have also improved at Delta Air Lines (DAL.N), which expects domestic travel demand to surpass 2019 levels next year.
United Airlines (UAL.O) said on Thursday it will fly its biggest domestic schedule since the start of the pandemic, offering more than 3,500 daily domestic flights in December – 91% of its domestic capacity compared to 2019 represents.
“There’s a lot of demand for it,” Chief Executive Officer Scott Kirby said.
The International Air Transport Association (IATA), a consortium of 290 airlines, expects air-carriers in North America to return to profits next year before their counterparts in other geographies.
The outlook for business travel – the industry’s cash cow – remains uncertain.
Airlines for America, an industry trade group, estimates that business travel accounted for up to 50% of the airline industry’s passenger revenue before the pandemic.
Carriers were banking on reopening offices for a revival in business trips this fall. But the Delta version forced many large employers to push back their office openings into the following year.
Airlines say revival is inevitable. However, there is no consensus on the timeline.
United’s Kirby expects business travel to return to pre-pandemic levels in 2023, but JetBlue (JBLU.O) chief executive Robin Hayes believes it “could take a few years.”
Hayes said the New York-based budget carrier has reallocated flights from some business markets to holiday markets.
“We believe that … the holiday will be strong,” Hayes told Businesshala in an interview. “Certainly we are looking into our forward bookings at the moment.”
Trans-Atlantic Route Reopening
Airlines, meanwhile, are buoyed by the Biden administration’s plan to reopen the United States to air travelers from Europe in November. The Trans-Atlantic route is one of the most attractive routes in the world and accounted for up to 17% of 2019 passenger revenue for the big three carriers.
All US carriers that serve the market have seen an increase in bookings since the announcement by the White House.
Kirby said last week United’s bookings for trans-Atlantic flights were up from the same period in 2019. Sales have also increased in Delta Air and JetBlue.
The reopening is not just an opportunity, but also considered a big test for the industry.
The reopening of the world’s most important long-distance market is expected to set a trend for other markets to follow. However, reimposing restrictions could also slow down the fragile recovery if COVID-19 cases start to rise again.
“Restrictions cannot resume where they have disappeared,” Hayes said. “It acts as a big disadvantage to demand.”