Domestic leisure travel demand back to pre-pandemic levels, airline CEOs say

Mar 31, 2021

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The travel recovery is officially here, two airline CEOs said on Wednesday.

Speaking at the U.S. Chamber of Commerce Aviation Summit, United Airlines CEO Scott Kirby said that demand for domestic leisure travel was back at pre-pandemic levels.

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“Domestic leisure demand has almost entirely recovered,” Kirby said. “It tells you something about that pent up desire to travel, the pent up desire to remake those connections.”

Kirby confirmed that the airline would see cashflow return to positive levels for the month of March, something the airline suggested was a possibility in an SEC filing earlier this month.

Notably, even as domestic leisure travel recovers, business and long-haul travel remain severely depressed.

“Business demand is still down over 80%, and of course international borders, particularly long-haul, are still closed,” he said. “So those are huge chunk of our business that are still almost at zero, but it’s really nice to see that recovery.”

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During a press conference marking Alaska Airlines’ inclusion in the Oneworld alliance, CEO Ben Minicucci was similarly optimistic, noting that the airline would earn positive cash flow for the month.

Although the airline typically sees about 30% of its customers traveling for business, and the rest for leisure or to visit friends and relatives, Minicucci said that the airline currently sees leisure demand recovering faster, something in line with what other industry insiders have observed.

Notably, leisure travel tends to offer significantly lower yields than price-agnostic business travel, while domestic flying does not always offer the same profits as long-haul travel.

Still, the booming demand — including current flying and forward bookings, as Americans book summer trips in anticipation of being vaccinated by then — is a welcome sign for airlines and the broader tourism industry.

Airlines are adding new routes and enhancing existing ones to take advantage of the summer demand — United is flying more than 100% of its 2019 capacity to Mexico, the Caribbean and Central America, and South America, where some countries have reopened to Americans.

Featured image by Alex Tai/SOPA Images/LightRocket via Getty Images

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