Airlines expect a post-coronavirus boom in leisure travel, they just don't know when
The coronavirus pandemic has laid the airline industry bare, cutting travelers to a fraction of last year's numbers and even reducing some big names to bankruptcy.
As Delta Air Lines CEO Ed Bastian described it in March: "This is 9/11, SARS and the Great Recession all rolled into one."
But the word from industry executives at the Boyd International Aviation Forecast Summit on Monday was of opportunity ahead, though that was mixed with a serious dose of realistic hardship still to come.
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"I'm pretty bullish on domestic leisure," Sun Country Airlines CEO Jude Bricker told TPG in an interview from the conference. He cited "pent up demand" among Americans looking to break their socially-distanced homebound lives as something the Minneapolis-based carrier is looking forward to.
The one thing Bricker could not say, nor could other executives speaking at the forum, is when that pent up wanderlust will hit.
Two separate analysts at Boyd put the coronavirus recovery in perspective. Even with flyers slowly trickling back, trade group Airlines for America (A4A) chief economist John Heimlich estimated a five-year recovery just to get back to 2019 levels. Boyd Group president Michael Boyd was even more pessimistic putting it at six years from now, or 2026.
Related: Southwest Airlines to add Chicago O'Hare and Houston Bush Intercontinental
Both Boyd and Heimlich expect U.S. domestic travel to return before international travel. However, airlines that rely in part on international connections to help support their domestic flying — like American Airlines, Delta and United Airlines — are likely to remain smaller for some time to come.
What is missing from the recovery, at least at this point, are lucrative business travelers. Companies are widely taking a more conservative approach to returning employees to the road than individuals are for their own escapes.
But even with the prognosis of a multi-year recovery and few corporate flyers in the immediate future, nearly every airline is preparing for a strong return of leisure flyers.
Related: Delta adds 5 new routes from LAX, Atlanta as rivals expand in the West
One thing Delta is beginning to look at is where people have gone during the pandemic, the airline's senior vice president of network planning Joe Esposito said at the forum. For example, it is looking at whether people who left, say, New York City, for the relative open space of places like Hartford or Syracuse will translate into a long-term need for more Delta flights to those cities.
In the meantime, Delta continues to add back flights to where people are going based on flights booked, said Esposito. And this is predominantly to outdoor-oriented leisure destinations like Florida or locations out West. Notably, the airline's Salt Lake City (SLC) hub will be back to 90% of 2019 levels by November based on a stronger regional return in travelers.
"People want to travel," he said. He added later that "every city has it own little story" in terms of how travelers are returning.
Related: Palm Springs is booming with new flights during the pandemic
Delta has not published its full November schedule yet. However, in October it flew just over 82% of what it flew in Salt Lake City a year ago, Cirium schedules show. Systemwide, Delta is only due to fly about half of what it flew 2019 during the month.
Many airlines say they do not expect a surge in air travel until there is a widely available vaccine for COVID-19. And while a vaccine could be approved by year-end or early next year, it's the "widely available" part that is expected to take many months longer.
Another unknown for airlines is how much staff furloughs earlier in October will slow their ability to respond to a sudden return in leisure flyers. The CEOs of both American and United — who together have let go of more than 30,000 workers — warned that the furloughs would hinder their ability to add back flights as they tried to convince Congress for more relief.
Related: More than 30,000 furloughs begin as 'terrible Thursday' arrives for airlines
Delta and Southwest were among the carriers that were able to avoid involuntary cuts through voluntary workforce reductions.
Still, some cities are emerging as early winners in the coronavirus recovery. Montrose (MTJ) and Steamboat Springs (HDN) in Colorado, Palm Springs (PSP), California, and Jackson Hole, Wyoming (JAC), have all seen airlines add flights and even some notable new entrants, including Southwest Airlines at the former three airports.
In addition, Wall Street analysts hold out hope that Transportation Security Administration (TSA) screenings will pass one million people a day by year-end. While mostly a symbolic measure, it will demonstrate that increasing numbers of travelers continue to trickle back onto planes.
Related: Southwest adds another new Colorado ski town, unveils Miami and Palm Springs routes
"If the patterns we've seen continue, Spring Break a little bit better [and] then, maybe, 2021 looks a little like 2019," Spirit CEO Ted Christie told TPG in an interview at the forum. While he characterized this as a positive trend, he noted that it will still represent a "lost year" or so of growth for the airline.
Christie is quick to note that this is Spirit's baseline recovery scenario. The reality could be either better or worse depending on what travelers do and, if there is one thing the pandemic has taught airline planners, the virus — and the recovery that is beholden to it — beats to its own drum.
Related: Spirit Airlines grabs coronavirus opportunity, adds Orange County flights
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