Airlines see uptick in summer bookings. Will it last?
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Are Americans ready to take to the skies this summer? Airlines are seeing an uptick in bookings that could be a sign of improving confidence among travelers eager to get out again and take advantage of some the most-flexible airline change-fee policies in a generation.
On Tuesday, American Airlines, Delta Air Lines, Southwest Airlines and United Airlines all reported slightly more passengers on flights, an improvement over guidance from as recently as two weeks ago.
“We have seen a little bit of a bounce off the bottom but my caution is to not draw too much in the way of conclusions,” Delta chief financial officer Paul Jacobson said at the Wolfe Research Conference on May 19.
The Transportation Security Administration saw its busiest day since the COVID-19 crisis began on Sunday, May 17. It screened nearly 254,000 people, including both travelers and airline staff, or nearly 10% of the total a year ago.
That improvement is still dominated by essential travelers. But, at least according to airline executives, does include modest increases in the number of people heading to Florida and other leisure destinations.
Delta is seeing this with its uptick in bookings primarily for flights to beach destinations, as well as activity “out west,” said Jacobson.
The Atlanta-based carrier has added a hundred flights to its schedule in June to keep up with demand — and to allow for social distancing onboard planes. Delta plans to add several hundred more flights to its schedule in July to keep pace with the increased bookings.
The catch, however, is that Delta still offers travelers the peace of mind to cancel flights at no charge. Jacobson said the airline still needs to “be careful” that new bookings actually turn into trips flown.
Delta was not alone in seeing an uptick.
“We’re seeing some modest improvements,” American Airlines president Robert Isom said at the Wolfe conference. “It’s a long way to go, but modest improvements [are happening].”
The Fort Worth, Texas-based carrier will fly roughly 33% of the schedule it flew a year ago in June, according to Cirium schedule data. This includes plans to resume more international routes, including to key destinations in Europe and South America.
United plans to resume flying about a quarter of its schedule in July after cutting around 90% of operations in May and June, it said in a securities filing on May 19.
Speaking at the Wolfe conference, the Chicago-based carrier’s commercial chief Andrew Nocella said cancellations appear to have stabilized at a “reasonable” level and new domestic bookings beginning to inch into positive territory. International travel, however, remains depressed with cargo driving the resumption of select long-haul routes.
And Southwest said in a securities filing on May 19 that its flights could be a third full in May, something that would give it a 20-point improvement from its guidance from April. Flights could be even fuller in June if the trend continues.
Altogether, the improvements reported by the four carriers suggests Americans are ready to begin traveling again. This comes even with requirements that passengers wear masks onboard flights and mixed results in keeping passengers socially distanced on flights.
Longer-term, major destinations like Disney World and Hawaii will need to reopen — and people feel safe to visit — before travel picks up in a significant way. Neither Disney nor the state of Hawaii have indicated when they will welcome visitors again.
Featured image by Jamie Squire/Getty Images.
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