Air Travel Demand Remains Strong After Summer, Execs Affirm

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During Cowen’s annual transportation conference Wednesday, executives of a couple of major U.S. airlines addressed the question of post-summer air travel demand, saying that, despite autumn’s approach, flight sales simply aren’t slowing down this year.

Following two years of lockdowns and restrictions, Americans’ still-pent-up travel demand continues to drive bookings, even as the busy summer travel season unofficially ends following the Labor Day weekend.

This summer, U.S. carriers have contended with an intensity of travel demand not seen since before the pandemic; and the four-day Labor Day holiday period saw 8.76 million passengers screened through TSA checkpoints, exceeding even 2019 numbers.

The start of a new school year typically means that families are taking fewer vacations after summer ends, a time when airlines traditionally rely more heavily on the business travel segment—which simply hasn’t rebounded as quickly as leisure travel.

But, United Airlines’ senior vice president Patrick Quayle told conference attendees that this year is defying historical trends, with no notable decrease in ticket sales between the months of August and September. “We’re seeing a really strong September,” Quayle disclosed, according to Bloomberg. “It does not appear that summer has come to an end. It’s that strong.”

Young woman at airport checking flight departures. (Photo via martin-dm / Getty Images / E+)

American Airlines CEO Robert Isom, who also spoke at Wednesday’s conference, echoed Quayle’s affirmation of continuing demand, saying that American’s leisure bookings remain “strong”. “We continue to see revenue and expense and margins tracking as we expected,” he said. “That’s good news.”

Regarding the business travel segment’s recovery, Isom revealed that American has only reached 75 percent of its 2019 revenue levels. Quayle similarly said that business travel bookings still fall short of pre-pandemic levels, but that today’s inflated airfare prices have driven revenue up. Both execs said that they expect an increase in business travel bookings as companies bring more employees back into the office.

Until then, they’re looking to rebounding demand for international air travel to shore up their revenues. With the recent repeal of border restrictions by several Asian and Pacific countries, transatlantic demand has come back strong. “Whenever countries reduce the entry requirements or eliminate entry requirements, we see really, really robust demand,” Quayle said, according to Reuters.

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Airline ticket pricing concept. (photo via iStock/Getty Images Plus/Evgen_Prozhyrko)

Powerful, persistent leisure demand—coupled with limited supply due to carriers’ staffing shortages, skyrocketing fuel costs and overall inflation—has enabled airlines to raise fare prices, which people have thus far been willing to pay.

However, investors and analysts have expressed concern that, with leisure demand historically diminishing in the autumn and inflationary pressures already heavily impacting consumers, the airline industry won’t be able to command such high prices.

Still, with higher and higher temperatures each year extending into September and October, it only makes sense that warm-weather getaways remain on the menu into the autumn months. And, that Americans’ as-yet-unsatiated appetite for meaningful trips (and, in some cases, extra savings accrued after two years of missed vacations) could continue to sustain booking levels throughout the fall.


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Source: TravelPulse


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